[2012] FWAFB 7858

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The attached document replaces the document previously issued with the above code on 12 September 2012.

The preamble has been amended.

Mirella Franceschini

Associate to Justice Iain Ross, President

Dated 9 October 2012

[2012] FWAFB 7858


FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.266—Industrial action related workplace determination

Schweppes Australia Pty Ltd
v
United Voice - Victoria Branch
(B2012/587)

JUSTICE ROSS, PRESIDENT
SENIOR DEPUTY PRESIDENT WATSON
COMMISSIONER ROE

MELBOURNE, 12 SEPTEMBER 2012

Workplace determination - relevant factors - s.275 Fair Work Act 2009 - meaning of ‘productivity’ in s.275(e) - matters at issue - provisional decision on some matters - further proceedings.

INDEX

  

PAGE

     

1.

Background

3

     

2.

The Schweppes Business

4

     

3.

The Legislative Framework

7

     

4.

The Matters at Issue

10

       
 

4.1

Relevant principles

10

       
 

4.2

Matters in Issue

14

       
 

(i)

Hours of work, RDOs, shift patterns and annual leave

14

       
  -

Contentions of the parties

19

         
  -

The Evidence

22

           
     

(i)

How does Schweppes propose to utilise the suite of shift arrangements available to it under its proposal?

22

     

(ii)

Comparative shift arrangements

24

     

(iii)

Benefits to Schweppes of the proposed shift arrangements

24

     

(iv)

The effect of the proposed shift arrangements on employees

27

     

(v)

Additional employment

31

     

(vi)

Conditions associated with proposed shift arrangements

32

         
  -

Consideration

40

           
     

(i)

The merits of the case

40

     

(ii)

The interests of the employees and employers who will be covered by the determination

41

     

(iii)

The public interest

44

     

(iv)

How productivity might be improved in the enterprise or enterprises concerned

45

     

(v)

Incentives to continue to bargain at a later time

45

     

(vi)

Other matters

45

         
  -

Conclusion

45

       
     

(ii)

Medical certificates for single day absences

49

     

(iii)

Wages and allowances increase

54

     

(iv)

Size change and asset care allowances

58

     

(v)

Workplace cooperation

64

     

(vi)

Nominal expiry date

67

     

5.

Clause 47 - classification structure review

72

     

6.

Conclusion and further submissions

80

1. Background

[1] On 23 September 2011, the Schweppes (Tullamarine) Production and Warehouse Employees Enterprise Agreement 2010 (2010 Agreement) 1 reached its nominal expiry date. The 2010 Agreement covers Schweppes Australia Pty Ltd (Schweppes), United Voice and the production and warehouse employees of Schweppes in the Supply Chain business unit at its Tullamarine production facility in Victoria, who are eligible to be members of United Voice (Employees). There are around 150 permanent production and distribution employees working at the Tullamarine site, subject to the 2010 Agreement: in June 2011, 92 were employed in Production; 13 in Distribution (bulk); 17 in Distribution (route); 8 in Quality, 14 in the Syrup Room (SRM) and 5 in the Main Stores.2

[2] In June 2011 Schweppes and United Voice (as bargaining representative for the Employees) 3 commenced negotiations for a replacement enterprise agreement, to be known as the Schweppes (Tullamarine) Production and Warehouse Employees Enterprise Agreement 2011 (proposed Agreement).4 Various disputes and issues arose between the bargaining representatives for the proposed agreement and on 15 December 2011 Schweppes locked out the Employees.

[3] On 10 February 2012, Senior Deputy President Kaufman made an order under s.423 of the Fair Work Act 2009 (Cth) (the Act), terminating all protected industrial action in relation to the proposed Agreement. 5 The making of that order was unopposed and the order is a ‘termination of industrial action instrument’, pursuant to s.266(2)(a) of the Act.

[4] During the post-industrial action negotiating period (which ended on 2 March 2012), Schweppes and United Voice did not settle all of the matters that were at issue during bargaining for the proposed Agreement.

[5] The relevant history of the bargaining between the parties was set out in an agreed statement of facts 6 as set out below:

2. The Schweppes Business

[6] Schweppes is a manufacturer and supplier of non-alcoholic and alcoholic beverages, including carbonated soft drinks, packaged water, ambient fruit juice, cordial, sports drinks, energy drinks and ready to drink tea. Some of Schweppes’ key brands include Schweppes, Solo, Cool Ridge and Spring Valley. In addition to its own brands, Schweppes also manufactures and/or distributes a number of products (including Pepsi, Sunkist, Gatorade sports drinks and Monster energy drinks) under licence and distribution arrangements with third parties and also manufactures products under contract. 7

[7] Schweppes operates within the beverage manufacturing industry. The industry primarily involves the manufacture of carbonated soft drinks, bottled water, fruit juice, cordial, sports drinks, energy drinks and milk drinks.

[8] The IBIS World Industry Report C2185 Soft Drink Manufacturing in Australia (March 2012) makes the following points about the industry in Australia: 8

[9] Mr Angus says that based on his experience in the beverage industry he agrees with the predictions and views set out above. 9 We note that the IBIS Report excludes bottled water, fruit juices and alcoholic drinks, all of which are produced at Schweppes’ Tullamarine site.10 During the course of his cross-examination Mr Angus was taken to a number of other parts of the IBIS Report, in particular:

[10] Schweppes submits that the main operational challenges it faces are:

[11] Schweppes has 10 manufacturing plants and distribution centres in Australia that receive, store, process or dispatch Schweppes' products. 17 In terms of comparability to Tullamarine, Mr Angus’ evidence was that Huntingwood was the most comparable in terms of volume and Welshpool was the most appropriate benchmark from a portfolio perspective (i.e. the mix of products).18

[12] The Tullamarine site manufactures, packages, stores and distributes non-alcoholic and alcoholic products including the PepsiCo range of CSDs, Schweppes Mixers, Sunkist, Solo, Gatorade sports drinks, Jack Daniels pre-mix, Monster energy drink, Spring Valley Juices, Cool Ridge water and Cottee's cordial.

[13] The Tullamarine site is said to be a critical production site for Schweppes for a number of reasons, including that:

[14] [text removed]

[15] As a result of the shift arrangements under the 2010 Agreement, Schweppes argues that it can only guarantee production at the Tullamarine site for 9 days in every two week (14 day) period. Additional production beyond these hours cannot be guaranteed, as it relies on employees volunteering for overtime or the availability of temporary labour. The Tullamarine site is said to be the only Schweppes production site across Australia that cannot guarantee production over 6 or 7 days per week, though generally speaking overtime offered by Schweppes is volunteered for and worked by employees. Schweppes has been able to man all additional shifts sought, by either volunteers or temporary labour. 19

[16] In the course of cross-examination, Mr Angus and Mr Todd were asked about the working arrangements at other sites. In summary, their evidence was as follows:

3. The Legislative Framework

[17] Section 266(1) of the Fair Work Act 2009 (the FW Act) provides that Fair Work Australia (the Tribunal) must make an industrial action related workplace determination (the Workplace Determination) if the following jurisdictional facts have been established:

[18] It is common ground that these jurisdictional facts have been established.

[19] Section 616(4) provides that the Tribunal must be constituted by a Full Bench for the purpose of making a workplace determination.

[20] The workplace determination provisions of the FW Act set out the scope of the merits arbitration required of the Tribunal. Sections 276 and 268, along with Division 5 of Part 2-5 of the FW Act deal exhaustively with the content of workplace determinations. Only 4 types of terms may be included in a workplace determination (see ss.267 and 268): ‘agreed’ terms; arbitrated terms dealing with the ‘matters in issue’; ‘core terms’; and ‘mandatory terms’ as set out below.

[21] Apart from ensuring that the workplace determination as a whole contains only permitted matters, satisfies the ‘better off overall test’ and does not contravene s.272(5) of the FW Act, the only ‘core term’ is a nominal expiry date no more than 4 years after the workplace determination comes into operation (s.272(2)). In this matter the nominal expiry date is in fact a ‘matter at issue.’

[22] We note that Schweppes contend that United Voice’s suggested clause 49 of the draft Workplace Determination (‘workplace cooperation’, a matter dealt with at clause 40 of the 2010 Agreement and which is also a ‘matter at issue’) will not be about a permitted matter, within the meaning of s.172(1) of the FW Act (see s.272(3)(a)).

[23] A workplace determination must not include any terms other than those required by s.267(1) (see s.268).

[24] In relation to coverage, the determination must be expressed to cover:

[25] On 3 April 2012 the parties filed a joint draft workplace determination, identifying the core terms, mandatory terms and agreed terms (Draft Determination). It is common ground that, apart from those clauses in the Draft Determination which are identified as ‘matters in issue’, all the remaining clauses are agreed terms and should be included in the Workplace Determination in that form.

4. The Matters at Issue

[26] The Tribunal is only required to conduct a ‘merits arbitration’ in relation to the ‘matters at issue’ as at the end of 2 March 2012. The parties are agreed that there are six principal matters at issue requiring an arbitral outcome from the Tribunal, namely:

[27] Schweppes and United Voice are in dispute as to whether clause 47 of the Draft Determination (‘classification structure review’) is an ‘agreed term’ or a ‘matter at issue’. We deal with this dispute later in our decision.

4.1 Relevant Principles

[28] In relation to each of the matters at issue the Tribunal is required to take into account each of the factors set out in s.275.

[29] To take a matter into account means that the matter is a ‘relevant consideration’ in the Peko-Wallsend 30 sense of matters which the decision maker is bound to take into account. As Wilcox J said in Nestle Australia Ltd v Federal Commissioner of Taxation:

[30] The use of the word ‘include’ in s.275 suggests that the Tribunal is not confined to those considerations alone, and can have regard to any other relevant considerations in the circumstances of the particular case. 32

[31] It is convenient to deal now with three of the factors identified in s.275, namely those factors set out in paragraphs 275(e), (f) and (g).

[32] Section 275(e) provides that one of the factors which we must take into account is ‘how productivity might be improved in the enterprise... concerned.’ The meaning of the word ‘productivity’ was the subject of some debate in the proceedings, particularly in relation to Schweppes’ shift pattern proposal.

[33] In its outline of submissions, Schweppes says, at paragraph 37:

[34] In his evidence Mr Angus also referred to the productivity increases said to result from the shift pattern changes proposed by Schweppes:

[35] United Voice contended that the benefits to Schweppes of the proposed shift arrangements (i.e. a reduction in overtime and shift loadings) could not properly be regarded as ‘productivity’ improvements within the meaning of s.275(e). This proposition relied on the evidence of Mr Cowgill. 33 Mr Cowgill’s evidence distinguished between the price or value and the quantity of inputs and outputs:

[36] Mr Cowgill was not cross-examined by Schweppes, nor was there any challenge to the admissibility of his evidence.

[37] The term ‘productivity’ appears in several Parts of the Act:

[38] ‘Productivity’ is not defined in the Act but given the context in which the word appears it is clear that it is being used to signify an economic concept. It may be regarded as a technical word and hence evidence may be admitted to interpret its meaning. 34

[39] The Productivity Commission defines productivity as:

[40] Similarly, the Commonwealth Treasury also defines productivity by reference to volumes of inputs and output:

[41] The Oxford Dictionary of Economics (2012) similarly defines productivity as the ‘amount of output per unit of input achieved by a firm industry or country’. 37

[42] We accept that the conventional economic meaning of the word productivity is the number of units of output per units of inputs. Productivity is a measure of the volumes or quantities of inputs and outputs, not the cost of purchasing those inputs or the value of the outputs generated. Schweppes incorrectly equates productivity with the average cost of labour per unit, which, properly understood, is a measure of nominal unit labour costs.

[43] In our view productivity, as used in the Act, refers to the conventional economic meaning of the quantity of output relative to the quantity of inputs. It is quite different in concept to the price of output and price of inputs, including the price of labour.

[44] The legislative context is also important. Context may require a word to be read more narrowly than if was considered in isolation. 38 In this regard we note that the ‘modern awards objective’ (s.134) requires consideration of the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden.39 The distinction between productivity and employment costs recognises that whilst employment costs will be affected by productivity in relation to the quantity of labour input required, the price of labour constitutes a separate and distinct consideration. A similar distinction is made between productivity and business competitiveness and viability in the ‘minimum wages objective’.40 It may be presumed that Parliament intended the word productivity to have the same meaning throughout the Act.41

[45] Accordingly, we find that ‘productivity’ as used in s.275 of the Act, and more generally within the Act, is directed to the conventional economic concept of the quantity of output relative to the quantity of inputs. Considerations of the price of inputs, including the cost of labour, raise separate considerations which relate to business competitiveness and employment costs.

[46] Financial gains achieved by having the same labour input - the number of hours worked - produce the same output at less cost because of a reduced wage per hour is not productivity in this conventional sense. A reduction of unit labour costs, achieved under Schweppes’ shift proposal through less overtime and lower shift loadings, does not constitute productivity within that conventional meaning. Similarly, an increase in the value of output achieved through product differentiation and a higher average value of the quantity of output is not productivity in the conventional sense.

[47] In each case, however, a financial benefit to Schweppes, other than through productivity improvement, is a relevant matter for us to consider. As Mr Cowgill observed in his evidence:

[48] It is common ground that the introduction of the proposed shift arrangements is in Schweppes’ financial interest and hence those benefits can be taken into account pursuant to s.275(c). The impact of such shift arrangements on employees is also a relevant consideration pursuant to s.275(c).

[49] Further, to the extent that the Schweppes proposal results in better utilisation of capital, allowing greater output from a given capital input, it would generate some productivity benefit in the conventional sense. Similarly, to the extent that the proposed shift arrangements facilitated investment in new, more productive capital equipment by Schweppes, it might also enhance productivity in the conventional sense.

[50] Finally we would also observe that to the extent that the proposed shift arrangements enhance innovation and competitiveness, that may raise a public interest consideration under s.275(d).

[51] As to s.275(f), neither party seeks any particular finding in relation to the reasonableness of the conduct of the bargaining representatives. It is not contended that such conduct was unreasonable. As mentioned earlier, the relevant bargaining history is the subject of an agreed facts statement. Accordingly we find that for the purposes of s.275(f), the conduct of the bargaining representatives was reasonable during the bargaining for the agreement.

[52] In relation to s.275(g), it is common ground that the bargaining representatives have complied with the good faith bargaining requirements.

[53] We now turn to some other general provisions which are relevant to the determination of the matters at issue.

[54] Section 577 states:

[55] Section 578 states:

[56] We now turn to each of the matters in issue.

4.2 Matters in issue

Issue (i) Hours of work, RDOs, shift patterns and annual leave

[57] This is the most substantive issue in dispute. The Tullamarine site currently operates three shifts (morning, afternoon and night) over a 35 ordinary hour week, Monday to Friday. All hours outside Monday to Friday, the shift span or in excess of 35 hours per week, are voluntary and paid as overtime. In particular, the 2010 Agreement provides that production and distribution employees at Tullamarine work under the following arrangements:

[58] Schweppes contends that the existing arrangements are unsustainable and for a range of business and operational reasons seeks the capacity to introduce 12 hour shifts on both a 6 day and 7 day shift pattern, and some changes in relation to the rostering of RDOs on the current 5 day shift pattern.

[59] Several ‘matters in issue’ arise in relation to hours of work, rostered days off (RDOs), shift patterns and annual leave from the shift patterns proposed in the Schweppes’ Draft Workplace Determination:

[60] In particular, Schweppes seeks a Workplace Determination which provides it with access to:

[61] The provisions sought by Schweppes are set out in Part 4 - Hours of Work and Relates Matters in its proposed Workplace Determination. These provisions, and the position of United Voice in relation to them, are summarised below.

[62] United Voice seeks the maintenance of current roster arrangements and provisions of the 2010 Agreement and opposes the changes sought by Schweppes. 44

[63] If its primary position is rejected, the United Voice submits that a 12 hour shift pattern should be based on existing employees having the opportunity to volunteer. Once an employee has volunteered the employee can be rostered at any time in the future for shift work. 45 United Voice also submits that if the Tribunal determines to introduce a compulsory 12 hour shift roster, then consideration should be given to the following matters46:

[64] We propose to set out the broad contentions advanced by the parties before turning to the evidence and our conclusion in respect of this ‘matter in issue’.

Contentions of the Parties

[65] Schweppes identified a number of factors it described as crucial with respect to shift arrangements. 47 It was submitted that the shift arrangements must contain the following elements:

[66] Schweppes also identified a range of benefits to it of utilising its access to the proposed shift arrangements 48:

[67] Schweppes also submitted other benefits associated with the shift arrangements it proposed 54 are:

[68] As we have indicated, United Voice opposes the changes sought by Schweppes. A survey of its members 55 indicates that 95% of the employees56 do not support the introduction of 12 hour shifts and it is submitted that the Schweppes proposal would result in significant reductions in take home pay. United Voice also submits that the evidence does not establish that the proposed shift arrangements would result in productivity improvements within the meaning of s.275(e) of the Act.

[69] We now turn to a consideration of the evidence. It is convenient to summarise the evidence in a thematic way, by reference to particular broad topics.

The Evidence

(i) How does Schweppes propose to utilise the suite of shift arrangements available to it under its proposal?

[70] Under its proposal, Schweppes would have the capacity to utilise the range of shift options proposed as it sees fit. If accepted, the proposal could result in any combination of arrangements, across operational areas or over time with Schweppes deciding the mix of arrangements to be applied at any time (subject to the proposed transitional arrangements as to the availability of access to some options in some operational areas over the life of the Determination and provisions associated with the shift patterns).

[71] Schweppes provided material in relation to hours of work, earnings and unit labour costs, compared to actual data for 2011, derived from modelling of a 6 day shift operating over some areas over 5 months of a year, and of the 6 and 7 day patterns operating across the whole facility all year. 57 That data was compared to actual data for 2011. Whilst there is some dispute as to the assumptions used for the calculations, they provide guidance as to the impact of those particular arrangements.

[72] The modelling of the partial 6 day pattern is premised on capacity charts which represent the status quo of the facility today. 58 The modelling of the full 6 and 7 day patterns is illustrative in nature, indicating an opportunity cost for Schweppes that may not materialise.59

[73] The evidence suggests that the opportunity afforded to Schweppes by its proposed shift arrangements would be utilised by some combination of 5, 6 and 7 day patterns across particular operational areas and particular times of the year. [text removed]

[74] In this respect, the evidence of Mr Angus 60 was:

[75] Mr Angus continued that “the cost per case analysis is (and was only intended to be) indicative only, should those production patterns be implemented and operational in that form,” 61 an observation which would apply equally to the estimates of the impact of the partial 6 and full 6 and 7 day shift arrangements on hours and earnings.

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[79] Schweppes will use temporary labour to fill additional positions within the 6 or 7 day shift patterns in the short term, with the intention to crew with permanent staff in the medium to longer term 62 (a two year horizon63).

[80] No information was provided by Schweppes in relation to hours of work, earnings and unit labour costs of the likely shift arrangements which would operate, in the short-term, if the Schweppes proposal were approved. The closest of the three scenarios modelled is the partial 6 day roster. However, that scenario departs materially from the most likely shift patterns which would be utilised having regard to the evidence of Mr Angus, as is indicated in the following table:

Table 1: Short-Term Utilisation of Existing Employees Shift Pattern Options

Partial 6 costing (Exhibit Schweppes 10)

Most Likely (evidence of Mr Angus)

 

6 Day

 

B1, B3, C6, QC, SRM , STORES

(November to March) - 85 employees

B1 and B3 all year - 41 employees

C6 (November to March) - 17 employees

 

5 Day

 

B9, B4, C8 and DC - 65 employees

QC, SRM , STORES, B1, B3, C6, QC, STORES all year - 92 employees

B1, B3, C6, QC, SRM , STORES
(April to October) - 85 employees

C6 (April to October) - 17 employees

* Existing employment numbers taken from Exhibit Schweppes 10, at page 43.

(ii) Comparative shift arrangements

[81] The evidence of shift arrangements at other Schweppes sites in Australia is set out earlier in our decision (see paragraph [16] above).

[82] The Moorabbin Manufacturing Operations Enterprise Agreement 2011-2015 64 which applies to the Moorabbin facility of Coca Cola Amatil makes provision for 12-hour shifts within clause 19.4 - Specific Arrangements for 12 Hours, 24/7 Shift Rosters. They are not presently utilised.65 The CCA Bayswater Pty Ltd Enterprise Agreement 2011-201466, in clause 5.7.6 -Shift pattern flexibility - provides for a 3 day x 12 hour shifts (3 on - 3 off), where a business requirement exists, subject to two (2) weeks' notice to employees.

(iii) Benefits to Schweppes of the proposed shift arrangements

[83] Evidence in relation to expected or likely financial gains to Schweppes arising from its shift proposal is limited in that it does not include the impact of the staggering of RDOs within the 5 day shift pattern. Further, the modelling undertaken by Mr Xureb is illustrative of a partial 6 day patterns and full 6 and 7 days patterns, none of which is likely to be implemented in practice.

[84] A financial benefit to Schweppes of [text removed] from its proposed shift arrangements can be inferred from the evidence of Mr Angus concerning the recovery, through that financial benefit, of the estimated cost of redundancy payments associated with the shift arrangements suggested by United Voice. 67 [text removed]

[85] Mr Angus evidence of [text removed] saving over [text removed] years implies an annual saving in the order of [text removed] per annum. Mr Angus believed the labour cost saving component of the total saving of [text removed] per annum to be approximately [text removed] per annum, accepting that a significant component of the financial benefit to Schweppes is not having to pay overtime 68 and a vast majority of the financial benefits would be experienced through reduced unit labour costs.69 His evidence was that installed capital is subject to a fixed depreciation cost and absorption of that fixed cost will not materially change relative to volumes if additional work was brought to Tullamarine, with any financial gain from increased capacity utilisation being marginal or incidental.70 Mr Angus’ evidence does not disclose the source of the additional [text removed] of prospective savings. Asked to think of an alternative saving, Mr Angus responded “other than the difference between the shift premiums paid on the five-day, versus the shift premiums paid on the six-day may come into the calculation as well. Primarily overtime savings, yes.”71

[86] Mr Angus relied on Mr Xureb for the information in his evidence and suggested that he would be able to provide details of exactly what was included. 72

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[88] Mr Xureb’s evidence was that the financial savings are essentially those associated with the labour cost savings: effectively the reduction in overtime and shift loadings. 73

[89] The evidence establishes that the financial gains to Schweppes from its proposed shift arrangements arises from labour cost savings due to the reduction in overtime and shift loadings.

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[94] We accept that there are limitations in the modelling of the financial benefits of the proposal but on any view of it the benefits to Schweppes are significant.

[95] The changed shift patterns proposed by Schweppes are directed to providing it with a right to operate on ordinary hours at any time, subject to shift penalties and other associated arrangements which would guarantee Schweppes the ability to utilise capacity, rather than rely on voluntary overtime (and temporary labour 74) to increase capacity beyond that currently available in ordinary time.

[96] Schweppes uses the term ‘guaranteed capacity utilisation’ to describe the capacity available without reliance on overtime and and/or temporary labour. Under current arrangements, Schweppes has a guaranteed capacity utilisation of 105 hours out of a possible 168 hours in any week (or 62.5%). By contrast, guaranteed capacity utilisation under shift patterns proposed by Schweppes would be as follows:

[97] The above material sets out the maximum guaranteed capacity utilisation which would be available to Schweppes in the event that the 5, 6 and/or 7 day shift patterns it proposes were included in a Workplace Determination. No evidence was produced as to the level of actual capacity utilisation under various mixes of the 5, 6 and/or 7 day shift patterns across operational areas and/or for different periods within the year, including the most likely mix which would be implemented by Schweppes over the likely duration of the Workplace Determination if the full range of shift options were approved.

[98] [text removed]

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[100] Limited evidence was provided in relation to the ability to meet required capacity, beyond guaranteed capacity by using overtime and temporary labour. Mr Angus did not deny that in last 10 years Schweppes, has been able to roster any shift it sought to run with voluntary overtime/temporary labour, 75 but stated that temporary workers are less efficient when irregular.76 He was unable to recall an occasion on which Schweppes had to go outside its usual temporary pool to obtain labour to roster a shift and, recounted only one incident where Schweppes secured a required permanent employee as a late volunteer.77 His evidence was that "Generally speaking any overtime offered by Schweppes is volunteered for and worked by employees." 78

[101] Mr Todd provided no direct evidence of an inability to staff a shift. He gave evidence that he had been told that there have been occasions in the past where Schweppes has been unable to operate on overtime days due to an insufficient number of volunteers for overtime. 79

[102] Schweppes submitted that while additional capacity utilisation, above guaranteed capacity, can be achieved through voluntary overtime and temporary labour, the absence of a guaranteed capacity, and the practical difficulties of obtaining volunteers for overtime and temporary labour, was unsatisfactory. Mr Angus gave evidence that improving the return on investment does not necessarily involve the ability to increase volume but requires a guaranteed ability to utilise capacity in order to facilitate the achievement of strategic objectives (e.g. product differentiation, and increased product value which requires greater capacity due to changeovers). 80 Further, Mr Todd’s evidence was that the current arrangements constitute ‘an onerous and time consuming process that must be followed for securing volunteers’81 and securing temporary labour ‘at the death’ is extremely onerous for Schweppes.82 Mr Kunkel gave evidence that there is an agreed term in the proposed Determination that provides for a simpler and less time consuming process for the allocation of overtime83.

(iv) The effect of the proposed shift arrangements on employees

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[119] United Voice brought evidence from 6 members employed by Schweppes, which set out their family responsibilities and community activities. The witness provided their assessment of the impact of the proposed shift arrangements on them (and more generally in respect to health and safety issues in some cases).

[120] The basis of a survey undertaken of its members who would be covered by the Determination showed 84 that 95% of the employees85 do not support the proposed 12 hour shifts, for several reasons:

[121] The usefulness of the survey data is limited because the results relate generally to ‘the company’s proposal to introduce 12 hour shift patterns over 6 and 7 days’ 86 and do not address 6 or 7 day shift patterns separately or a combination of 5, 6 and 7 day shifts, which appears likely to occur in practice under the Schweppes proposals during the term of a Workplace Determination. The perceptions reflected in the survey and the evidence of individual employees are not informed by knowledge of how the proposed shift arrangements might be utilised in practice, or by experience of working those shift patterns at Schweppes. The survey responses were, however, informed by a knowledge of the broad proposal by Schweppes to allow it access to any combination of 5, 6 and 7 day shift patterns and their associated provisions.

[122] The United Voice witnesses expressed concern that the proposed shift arrangements would detract from their capacity to meet family responsibilities and continue to engage in community activities. Particular reference was made to the disruption of weekend activities.

[123] The Schweppes proposal in Clause 2 of Appendix D, relating generally to all shift patterns, provides for Schweppes to allocate employees to particular shift patterns and shifts according to operational requirements (clause 2.1). That allocation is subject to priority afforded to employees in the allocation of a particular shift within a pattern (clause 2.2.1) and a particular shift pattern (2.2.2.) to an employee who is unable to work that shift or pattern due to personal circumstances, has unsuccessfully explored all reasonable alternative personal arrangements and, in the case of a particular pattern, is prepared to undertake necessary training to allow allocation to a particular pattern. Clause 2.3 provides for shift swaps if approved by management.

[124] In the event that its primary position is rejected, United Voice seeks the introduction of provisions to address work/life balance, requiring Schweppes to:

[125] United Voice 87 led evidence from two expert witnesses concerning health and safety issues relevant to 12 hour shift patterns:

[126] Mr Holland’s evidence drew on research undertaken by him assessing the impact of 12 hour shifts in ten companies. Key findings were:

[127] Mr Holland also found that 3 of the 10 organisations had workers’ compensation claims due to increased exposure of employees to work stressors; cases of workers returning from injury being unable to sustain 12 hour shifts; and impacts on leisure and work life balance.

[128] Holland expressed concerns in relation to the Schweppes proposal, about the ability of older workers to work sustained 12 hour shifts, the safety of using industrial equipment and undertaking manual handling over extended shifts; the impact of 6am and 6pm shift starts on work life balance and sleep patterns; the erosion of recuperation time; and the absence of fatigue management processes within the Schweppes proposal.

[129] Ms Ferguson identified the following factors for consideration in relation to the Schweppes proposed shift patterns:

[130] Ms Ferguson identified key rostering principles in relation to the proposed change:

[131] Ms Ferguson’s evidence was that a proposed shift pattern of the type sought by Schweppes should not be implemented without a detailed risk assessment of, at a minimum, fatigue related risks. Such a risk assessment was said to be consistent with standard and proper practice.

[132] The evidence was not subject to any evidentiary challenge by Schweppes. Neither witness was required for cross-examination.

[133] United Voice also tendered and relied on a series of documents and journal articles in relation to shift work 90, focussed on 12 hour shift arrangements and drew attention to several key contentions91. Schweppes directed our attention to other contentions within the same publications92. The research reflected in the documents as a whole raises potential negative and positive outcomes associated with extended shifts, rather than supporting a conclusion that extended shifts are uniformly good or bad. The research highlights the importance of appropriate roster design and control measures and proper risk assessment having regard to the evidence in relation to risks associated with 12 hour shift arrangements, directed to maximising the potential benefits of the shift arrangements and avoiding or minimising any potential costs and/or risks.

[134] Mr Kunkel’s evidence, based on analysis by Professor Harper relied on by Schweppes in the s.423 proceedings before Senior Deputy President Kaufman, was that the average and median age of the employees to be covered by the Workplace Determination is 43 years or more, with 23% of employees aged over 50 years.

[135] United Voice also brought evidence from three members concerning health and safety issues. The evidence from Mr Kara reflected his views, informed by his experience working an 11 hour shift with an earlier employer. The evidence of Mr Cachia, a Health and Safety Representative (HSR) at Schweppes, reflected his observations, made in the context of the operational environment at Tullamarine. The evidence of Mr Villani, also a HSR at Schweppes, reflected his experience with 12 hour shifts with an earlier employer and his recollection of one incident occurring 5 years ago at Schweppes concerning an employee working repeated 12/14 hour shifts.

[136] Schweppes’ evidence in response was essentially to the effect that health and safety issues arising in the context of 12 hour shift patterns would be specifically addressed through risk assessment and established health and safety policies and processes, through which appropriate control measures to eliminate or manage specific risks associated with any proposed shift pattern can be developed and implemented, when the forms of shift patterns approved was known.

[137] It is apparent from the evidence that Schweppes has not undertaken the following steps:

(v) Additional employment

[138] The evidence of Mr Angus is that under the most likely shift changes introduced by Schweppes in the short-term:

[139] [text removed]

(vi) Conditions associated with proposed shift arrangements:

[140] The Schweppes proposal 104 entails the staggering of RDOs across all 5 working days under a 5 day shift pattern in distribution and RDOs scheduled either every second Monday or across all 5 working days under a 5 day shift pattern in Manufacturing, which alternatives Schweppes could apply at its discretion with one week’s notice.105

[141] As noted above, no information has been provided in relation to the impact on employee hours and earnings and unit labour costs specifically in relation to the Schweppes proposal in respect to RDOs on the 5 day shift pattern. 106

[142] The employee witnesses raised concerns about changes to the current RDO arrangements on various bases: in two cases related to the family value of 3 day weekends, in one case because of the effect on a very specific usage made of the current RDO and in most cases, expressing concern about the possibility of changed RDOs which would remove their ability to plan social, community and family activities.

[143] The shift loadings supported by Schweppes and United Voice are as follows:

Table 4: Shift Loadings - Schweppes and United Voice

 

Schweppes Workplace Determination

United Voice

6 day

Clause 3 of Appendix F

  

3.1(a) - day (Mon-Wed)

1.39%

15%

3.1(b) - day (Thu- Sat)

6.39%

30%

3.1(c) - night (Mon-Wed)

11.39%

45%

3.1(d) - night (Thu- Sat)

16.39%

60%

7 day

Clause 3 of Appendix G

    

3.1(a) - day

19.29%

42%

3.1(b) - night

29.29%

72%

Other issues

Wage increase

  

Should reward employees for efficiency/productivity/financial benefit to Schweppes

[144] Some context for the competing positions is provided by the provisions of the 2010 Agreement and the underlying award.

[145] The 2010 Agreement provides:

[146] We shall refer to the Food Beverages and Tobacco Industry Aerated Waters General Award 1996 as the Transitional Award. The parties agreed that Clause 3 of the Determination should include a provision in similar terms except that Clause 3.1 would provide that “This agreement is to be read in conjunction with terms and conditions of employment outlined in the Food, Beverage and Tobacco Manufacturing Award 2010.” We shall refer to this Award as the ‘Modern Award.’

[147] Both the Transitional Award and the Modern Award provide for the introduction of 12 hours shifts in similar but not identical terms. (Clause 30.5 of the Modern Award and Clause 28.4 of the Transitional Award.)

[148] The Modern Award provides at Clause 30.5 (c) that

[149] The 2010 Agreement provides that the ordinary hours are 35. Both parties agree that this should be maintained in the proposed Determination.

[150] The 2010 Agreement provides (Clause 17.1) for a 30 minute unpaid meal break for Monday to Friday day workers and that afternoon and nightshift employees receive a 20 minute paid meal break. The Transitional Award (clause 28.5) and the Modern Award (clause 30.3(b)) provides that continuous shift workers must be paid for a 20 minute paid meal breaks. The six and seven day rosters proposed by Schweppes meet the definition of continuous shift work in the Modern Award.

[151] The Transitional Award and the Modern Award provide for night shift penalty of 30% where the night shift is non-rotating as is the case in Schweppes’ proposed 5, 6 and 7 day rosters.

[152] The parties agree that for workers on the 5 day roster shift penalties shall be as per the Modern Award Clause 30.1, 30.2 and 30.3. (Appendix E clause 3 of the proposed Determination)

[153] The relevant conditions associated with a 12 hour shift pattern under the 2010 Agreement, the Transitional Award, the Modern Award and the proposals for the Workplace Determination are as follows:

Table 5: 12 Hour Shift Pattern Conditions

 

2010 Agreement

Transitional Award

Modern Award

Agreed provisions in proposed Determination

Schweppes proposed Determination

United Voice alternative proposal

Meal Break on 5 day roster day shift

30 minutes unpaid

30 minutes unpaid

30 minutes unpaid

30 minutes unpaid

   

Meal Break on 5 day roster night shift

20 minutes paid

20 minutes paid

20 minutes paid

20 minutes paid

   

Meal and rest breaks on 6 and 7 day roster

NA

Paid

Paid

 

40 minutes paid and 20 minutes unpaid

40 minutes paid and 20 minutes unpaid

Night shift penalty for 5, 6 and 7 day rosters

30%

30%

30%

  

10% for night shift

30%

Hours which would be regarded as overtime or shift penalty under present Agreement paid at overtime or shift penalty rates.

Overtime as part of 7 day roster

NA

  

All overtime at 100%

  

Plus 9.29% for built in overtime on 7 day roster paid each hour

Plus 1.39% for inconvenience and built in overtime on 6 day roster

Paid each hour.

All overtime at 100%

Overtime

5 day roster

50% for first two hours and 100% thereafter. 100% on RDO or weekends on afternoon, night shift,. 100% Sundays,150% on public holidays

50% for first two hours and 100% thereafter on day shift

50% for first three hours and 100% thereafter on day shift

50% for first two hours and 100% thereafter. 100% on, RDO or weekends on afternoon, night shift. 100% Sundays. 150% on public holidays

    

Overtime 6 and 7 day roster

NA

  

All overtime at 100%

  

50% for first two hours and 100% thereafter on day shift and 100% on afternoon, night shift on RDO or weekends. 100% Sundays. 150% on public holidays

All overtime at 100%

Penalty for Saturday work on 6 and 7 day rosters

NA

50% (in substitution of night shift penalty)

50% (in substitution of night shift penalty)

  

5% where roster includes Saturday

Plus 10% for night shift

For all hours worked on roster (equates to 15% for day shift Saturday hours and 45% for night shift Saturday)

50%

Hours which would be regarded as overtime or shift penalty under present Agreement paid at overtime or penalty rates.

Penalty Rate for Sunday work on 6 and 7 day rosters

NA

100% (in substitution of night shift penalty)

100% (in substitution of night shift penalty)

  

5% where roster includes Sunday

Plus 10% for night shift

For all hours worked on roster (equates to 15% for day shift Sunday hours and 45% for night shift Sunday hours)

100%

[154] The penalties applicable, if paid each rostered hour, under the Schweppes and United Voice proposals and the Modern Award are as follows:

Table 6: Applicable Penalties

 

SCHWEPPES

UNITED VOICE ALTERNATIVE

MODERN AWARD (35 ORDINARY HOURS)

(OVERTIME HOURS ON SUNDAY ON 7 DAY ROSTER)

MODERN AWARD (35 ORDINARY HOURS AND PAID BREAK- IE 36 PAID HOURS ON 6 DAY AND 42 PAID HOURS ON 7 DAY ROSTER)

6 DAY MON-WED (DAY)

1.39%

15%

0%

2.77%

6 DAY THURS-SAT (DAY)

6.39%

30%

16.67%

18.05%

6 DAY MON-WED (NIGHT)

11.39%

45%

30%

31.94%

6 DAY THURS-SAT (NIGHT)

16.39%

60%

36.67%

38.06%

7 DAY

19.29%

42%

21.43%

21.43%

7 NIGHT

29.29%

72%

42.85%

42.85%

[155] The 1.39% allowance on the 6 day roster amounts to a payment of an additional 0.486 hours pay in a 35 hour week or 0.5 hours pay in a 36 hour week.

[156] Schweppes propose that 40.833 hours per week be paid under the 7 day roster. The overtime embedded in the roster is 5.833 hours if the unpaid meal break is not included. The 9.29% allowance amounts to a payment of an extra 3.793 hours pay.

[157] The notice and minimum periods supported by Schweppes and United Voice are as follows:

Table 7: Notice and Minimum Periods

 

Schweppes Workplace Determination

United Voice

Clause 3.1.1 of Appendix D - change in a pattern

2 weeks notice

6 weeks notice

Clause 3.1.2 of Appendix D - change within a pattern

1 weeks notice

2 weeks notice

Clause 6.1 of Appendix F and clause 6 of Appendix G - Minimum period an employee who has been changed to a new shift pattern remains on it

2 weeks
(amended in transcript to 4 weeks 107)

12 weeks (less by mutual agreement)

[158] Clause 4.5 of appendix G of the Schweppes proposed Determination provides that: "No employee will be required to work more than four consecutive shifts unless agreed by the employee and management." Mr Angus accepted in evidence that it should be amended to read: "No employee will work more than four consecutive days," 108

[159] It is agreed that the 7 day shift pattern proposed by Schweppes would attract an additional (5th) week of annual leave under the National Employment Standards (NES). 109 The Schweppes proposal in respect of the 6 day shift pattern is for 4 weeks annual leave.110 That position is accepted by United Voice in respect of the Monday to Wednesday shift but it proposes an additional (5th) week of annual leave in respect to the Thursday to Saturday shift.111 This proposition is advanced as a matter of merit, rather than as an entitlement arising under the NES.112

[160] Schweppes proposes a one-off payment of $500 in recognition of the introduction of shift pattern in the Determination. United Voice seeks a one-off payment of $10,000. 113

Consideration

[161] The submissions in respect to hours of work, RDOs, shift patterns and annual leave were advanced at a general level, with Schweppes seeking within a Workplace Determination, an authority to implement 5, 6 or 7 day shift patterns, in any combination across operational areas and throughout the year, subject to the conditions proposed for the proposed shift patterns. United Voice opposed any provision whereby Schweppes could utilise 6 or 7 day shift patterns or, in the alternative, submitted that if such shift patterns were permitted they should be based on existing employees having the opportunity to volunteer to work them and with a range of associated conditions.

[162] It is not certain what actual shift arrangements would be utilised by Schweppes in the event that 5, 6 and 7 day shift patterns were available to it. The actual shift patterns employed would depend on demand in particular process areas and other commercial considerations. Subject to these uncertainties, the evidence of Mr Angus and relevant production data suggested an intention to run the 6 day pattern in B1, B3 and C6, starting September or October for part of the year, with the 6 day shift in B3 being an ongoing arrangement and, subject to decisions to bring outsourced product back to Tullamarine, a likelihood of running the B1 line on the 6 day pattern for full year and at some stage operating a 7 day pattern in the peak.

[163] This outlook gives some indication of the likely utilisation of the shift patterns which may be utilised although, as noted by Schweppes, there can be no certainty as to the actual pattern which might be used given the uncertainties associated with the forward planning of business needs and outcomes. 114

[164] The generalised nature of the debate and the absence of any clarity as to the actual shift patterns which might apply meant that much of the information put to us as to the impact of the proposed shift arrangements, on unit labour costs, hours of work and employee earnings was indicative only, based on the modelling of three particular arrangements (the partial and full 6 day and full 7 day shift patterns). Such information is of some assistance, allowing broad conclusions to be drawn as to the impact of particular shift arrangements upon Schweppes and its employees at Tullamarine, but does not provide specific information as to the effect on unit labour costs, hours of work and employee earnings of actual shift patterns which might be utilised.

[165] It is possible, and necessary for the purpose of our decision, to draw some general conclusions, referable to s.275 of the Act, as to the likely effect of access to and utilisation by Schweppes of the shift arrangements reflected in its proposed Workplace Determination. We now turn to our consideration of the particular factors set out in s.275.

(i) The merits of the case

[166] Consideration of the merits of the case advanced by Schweppes for the shift arrangements proposed in its Workplace Determination requires a balancing of the contentions and evidence advanced by the parties, directed largely but not entirely to the competing interests of Schweppes and its employees. These matters are addressed in relation to the other relevant parts of s.275 of the Act below and a balancing of those considerations is reflected in our conclusion below. In our view, the merits favour the introduction of the arrangements we propose.

(ii) The interests of the employers and employees who will be covered by the determination

[167] Schweppes pointed to a range of benefits which, it submits, arise from its proposed shift arrangements 115, including increased capacity utilisation, increased productivity, labour cost savings, an increased return on capital invested, improved competitiveness, improved longer term financial and commercial strength, an increased capacity to attract new investment and grow strategically and a better capacity to meet demand fluctuations.

[168] The issue of productivity, whilst a matter affecting the interest of Schweppes, falls within s.275(e) and is considered below.

[169] The most significant benefit to Schweppes in securing the ability to operate 5, 6 or 7 day shift patterns arises from labour cost savings: effectively the reduction in overtime and shift loadings. 116 The evidence establishes that Schweppes incurs greater labour costs than it would incur under the implementation of 6 and/or 7 day shift patterns it proposes within part or the whole of its Tullamarine operations. [ text removed]

[170] [text removed]

[171] The benefit said by Schweppes to arise in respect of increased capacity utilisation is also related to the reduced labour costs associated with its proposal: in effect the ability to access additional capacity without or with lesser reliance on overtime and temporary labour. Guaranteed capacity, as the expression is used by Schweppes, is the level of capacity available under current arrangements without utilising voluntary overtime and/or temporary labour. The evidence 117 shows actual capacity utilisation in excess of the 62.5% level of guaranteed capacity cited by Schweppes in some areas, particularly in the production areas of B1, B3 and B9 and the support areas of SRM and quality over the peak demand months. Equally, some areas do not operate to that guaranteed level of capacity at some times in the year. There is also evidence that, despite the voluntary nature of overtime and the inconvenience and cost of using temporary labour, Schweppes has been able to operate at greater actual capacity without evidence of an inability to secure volunteers for overtime or temporary labour from its usual pool. We accept, however, that the fact that Schweppes has achieved additional production through overtime and temporary labour does not diminish the appropriateness of seeking out more cost effective means of achieving the same output levels and providing a broader range of strategic options.

[172] From the evidence, the issue about capacity utilisation is not so much about an inability to increase capacity to meet periods of high demand but the inability to do so without incurring the higher labour costs, resulting from overtime payments and higher costs incurred in respect of temporary labour.

[173] [text removed]

[174] Schweppes also identified improved competitiveness as a benefit advancing its interest which would arise from its proposal. To the extent that its proposal provided lesser labour costs than it would otherwise incur and it might provide a broader range of commercially viable strategic options, the competitive position of Schweppes would be improved. In the latter respect, the availability of the 12 hour shift options proposed would put it on a better or equal footing with CCA in respect of the provision made for 12-hour shifts within clause 19.4 of the Moorabbin Manufacturing Operations Enterprise Agreement 2011-2015 118 (on a voluntary opt-in basis) and clause 5.7.6 of the CCA Bayswater Pty Ltd Enterprise Agreement 2011-2014.119

[175] The Schweppes proposal would also provide it with additional options for meeting fluctuations in demand. Such fluctuations might be met by volunteer overtime and temporary labour and, depending on the level and duration might be best met in that way, albeit at a higher cost to Schweppes. The option of a 6 or 7 day shift pattern for a period of time may provide a more cost effective and practical alternative in some circumstances: for example where a sustained and relatively predictable period of high demand needs to be met.

[176] [text removed]

[177] The utilisation of additional shift patterns would also potentially impact on the interests of employees, and will certainly impact on some employees, in respect of their earnings, hours and patterns of work, family and community responsibilities and activities and, potentially, their health and safety. Given the nature of the Schweppes proposal, providing a range of shift pattern options, which would be differently accessed in particular production and support areas, and the different personal circumstances of employees, the impact of the proposal would vary greatly between particular employees. The impact on the hours and earnings of a particular employee would depend on their current working patterns - ordinary and overtime - and their new working patterns, if changed, when Schweppes accessed additional shift options. Some employees may continue to work within past work patterns with no or marginal change. Others might experience a significant change in their work patterns. Depending on the specific shift arrangements they undertake into the future some employees will increase their earnings (and hours) whilst others will suffer a reduction. Equally the impact on family responsibilities would depend on whether their working patterns were changed and their particular family circumstances and ability to reorganise around changed working patterns. Some employees moving to a three day work week may, with some adjustment to their family arrangements, find the additional days away from work beneficial. Other employees might experience significant, and at worst unmanageable, dislocation to their capacity to meet their family responsibilities.

[178] Mr Xureb provided estimates of average hours of work and average earnings of employees under the 5 day pattern in 2011, the proposed partial 6 day pattern, and the full 6 and 7 day patterns. 120  Whilst not directly relevant to the most likely shift arrangements which Schweppes would employ, the estimates provide useful information in relation to those specific shifts arrangements. At an aggregate level, the utilisation of a 7 day pattern for the full year in all areas would have a more limited impact on employee earnings and hours than a partial or full 6 day pattern. A 6 day pattern applied in all areas all year would significantly reduce hours and earnings, whilst the utilisation of a 6 day pattern for peak demand areas over the five peak production months - the partial 6 pattern - would result, on average in a less significant reduction in both hours of work and earnings for current employees. However, aggregate or average data masks the reality that, given the evidence as to the likely utilisation of a mix of 5, 6 and 7 day arrangements under the Schweppes proposal, the impact on individual employees will depend on the their current shift arrangements and work patterns (including the working of overtime) and the new shift patterns which they would work. In some cases working patterns for a particular employee might be unchanged or marginally changed. For others the impact might be very significant.

[179] Data provided by Mr Xureb in respect of earnings excluding employees who did not work for a full year in 2011 121 indicate that 46% of employees would earn less than the average earnings under the partial 6 day pattern than in 2011. The corresponding figures for the full 6 and full 7 day shift patterns are 73% and 30% respectively. The same data, normalised to remove the impact of the protected industrial action,122 indicate that a significant majority of employees would earn less than the average earnings under either 6 day pattern. The evidence shows, on average, a significant reduction in overtime hours within each of the modelled shift patterns.

[180] It is not possible, from the available evidence, to draw conclusions in respect of particular employees; but the aggregate figures suggest that the new shift arrangements implemented under the Schweppes proposal would result in a loss of earnings for many employees.

[181] The evidence that overtime levels varied between individual employees ranging from an average of 0.09 hours per week to 24.33 hours per week 123 and the data in the table in paragraph [105] above shows that in 2011, 10% of employees received 23% of overtime earnings, while 35% earn only 12%, indicate not only the diversity of current earnings between employees but suggests that new shift patterns will involve very significant reductions for some employees.

[182] It should be noted that the level of reductions in average earnings under the partial 6, full 6 and full 7 day shift patterns relative to 2011 actual average earnings 124 is associated with relatively comparable reductions in hours worked125. Further, whilst the use of overtime and temporary labour to increase capacity over many years has resulted in a high level of institutionalised overtime, with many employees earning significant overtime earnings (with the associated additional working hours), employees do not have an ‘entitlement’ to current levels of overtime. Nonetheless, it is clear that some employees would suffer a significant loss of income, with reduced hours of work, which needs to be managed. The reduction in penalty rates proposed by Schweppes will also contribute to likely income loss.

[183] United Voice members who gave evidence expressed a concern that the proposed shift arrangements would detract from their capacity to meet family responsibilities and continue to engage in community activities.

[184] As we have already noted the Schweppes proposal will impact differently on the work/life balance of particular employees, depending on what, if any, changes are made to their working patterns, the nature of their family and community responsibilities and activities and the capacity to adjust their personal arrangements. The impact on particular employees and employees in general will also depend on arrangements associated with the implementation of new shift patterns, including the extent to which personal circumstances can be and are accommodated and the provision of adequate notice to allow alternative personal arrangements to be made.

[185] Much material was put to us in relation to health and safety issues associated with working extended shifts. United Voice contended that the implementation of extended shift arrangements implemented without adequate prior attention to health and safety issues raised serious issues going to the interests of employees. Health and safety issues arising in the particular context of extended shift arrangements could adversely impact upon employees unless these issues were adequately assessed and addressed.

[186] As noted in paragraph 143, Schweppes has not taken sufficient steps to prepare for the implementation of extended shift arrangements. It has, however, indicated that it will do so prior to giving effect to any changed shift arrangements permitted by the Workplace Determination 126

[187] The research which was drawn to our attention identifies particular issues which Schweppes will be required to address in order to properly meet its health and safety obligations.

[188] The findings of Associate Professor Holland 127 do not support a finding that 12 hour shifts arrangements are inherently unsafe, but provide support for proper planning and systematic study of health and safety implications of extended shift arrangements. Associate Professor Ferguson’s evidence128 supported trialling of any new roster to monitor outcomes such as employee morale, incidents, sleep and fatigue, productivity and absenteeism.

[189] Associate Professor Ferguson’s evidence 129 raises several implications of extended shift arrangements for non-work time: working outside standard work weeks impacts on non-work life potentially both negatively and positively, requiring time for an individual and their family to adjust to a different schedule and recommends support in managing the change and recognition that a changed schedule may result in irresolvable conflicts with family and domestic life for some workers.

[190] That evidence, and the other research to which we were directed, does not establish that an extended shift arrangement necessarily creates unmanageable health and safety risks. The research, as a whole, suggests both advantages and disadvantages of extended shift arrangements and does not establish that 12 hour shifts are inherently unsafe. The research raises issues - in relation to health and safety and more broadly, which need to be considered in the design, implementation and operation of shift arrangements.

[191] Schweppes noted that work arrangements, including those involving shift patterns, are subject to established health and safety regulation. However, we consider that it is appropriate to include in the Workplace Determination parameters for the trialling, monitoring and assessment of the impacts of shift patterns including the health and safety implications.

(iii) The public interest

[192] As a general proposition initiatives which enhance productivity; increase competition in a market; or create employment, will attract the public interest.  Conversely, union claims for wage increases and employer claims to reduce entitlements, will not normally have a public interest component.  Such claims are likely to turn of the merits of the particular proposal.  While claims to increase or decrease labour costs will be in the interests of the party concerned, and hence attract s.275(c), they are unlikely to attract the public interest.

[193] In the context of this matter, the financial benefit to Schweppes arising from its shift proposal does not, in itself, raise public interest considerations. Some public benefit accrues from the additional employment associated with the Schweppes proposal:  23 additional employees associated with the staggered RDO 130 and additional crewing, filled by temporary labour for much or all of the period over which the Workplace Determination will operate in respect to the 6 and 7 day shift arrangements.131 There is no evidence to suggest that the continuation of the Tullamarine operations of Schweppes is at risk. Although there may be some marginal contribution to competition in a highly concentrated market, the evidence does not establish significant benefits. Overall, the shift arrangements proposed by Schweppes do not give rise to significant issues in the public interest, either in favour or against the Schweppes’ proposal.

(iv) How productivity might be improved in the enterprise or enterprises concerned

[194] As already noted in our decision, the benefit to Schweppes under its proposal from a lower unit labour cost achieved by the capacity to schedule production in ordinary time hours does not constitute productivity in the conventional sense. Whilst productivity benefits in the conventional sense might arise from an ability to more fully utilise existing capital equipment any such benefit associated with new shift arrangements would be marginal or incidental. 132 There is general evidence that the inability of Schweppes to utilise the alternative shift arrangements it proposes is a constraint on investment at the Tullamarine site, but there is no evidence that the operation of the shift arrangements proposed by Schweppes would generate capital investment, nor is there any evidence as to its effect on productivity.

(v) Incentives to continue to bargain at a later time

[195] The broad authority which Schweppes seeks to give effect to a range of extended shift options, with significant discretion provided to it and limited constraints, would, if included in the Workplace Determination diminish the incentive for Schweppes to negotiate around shift arrangements in future bargaining. The more limited arrangements we propose will provide some joint experience of extended shifts arrangements and provide a better basis for bargaining arrangements which reflect the particular circumstances at the Tullamarine site and balance the interests of the parties.

(vi) Other matters

[196] Section 275(b) is of no relevance to the current matter. Further, no issues were raised in relation to the matters in ss.275(f) and (g) of the Act in relation to this matter at issue.

Conclusion

[197] We are satisfied that the implementation of changed shift arrangements would provide financial and commercial benefits in the interests of Schweppes. Against that, we are satisfied that such changed shift arrangements would adversely affect the interests of some employees in respect to earnings and their family and community responsibilities. The extent, both in terms of spread and the level, of that impact would depend on what arrangements were implemented by Schweppes within the authority they seek and the conditions associated with the new shift arrangements.

[198] On the material before us, we are not satisfied, having regard to the matters in s.275, that the Workplace Determination should generally authorise any combination of 5, 6 and 7 day shift arrangements, in the matter sought by Schweppes. We are, however, prepared to include in the Workplace Determination a more limited form of access to extended shift arrangements, which will provide financial and commercial benefit to Schweppes and be subject to suitable measure to ameliorate the adverse impacts on employees. As indicated during the course of the proceedings we will make an in principle decision at this stage, allowing the parties a further opportunity to put submissions in relation to the more limited extended shift arrangements we set out below. The parties will also have the opportunity to address some issues we have left outstanding.

[199] We have come to this conclusion for several reasons.

[200] First, we are not satisfied that Schweppes has made out a case for a general authority to utilise any combination of 5, 6 and 7 day shift arrangements and the associated conditions it proposes. In large part this reflects the fact that much of the evidence was directed to illustrative information in relation to the operation of 5, partial and full 6 and 7 day shift arrangements. The evidence before us does not provide us with a sufficient basis to assess and balance the impact on the interests of Schweppes and its employees, and the public interest, of the range of options which might be utilised by Schweppes within a general authority for Schweppes to implement the shift arrangements it proposes.

[201] Second, a more limited access to extended shift arrangements is appropriate given the uncertainty about the impact on the interests of employees and allows for measures to be tailored to ameliorate negative effects upon employees relevant to the particular shift arrangements permitted.

[202] Third, the more limited access to extended shift arrangements we have decided upon will provide a basis for future negotiations, better informed by an assessment of the actual impact of and conditions required for any possible expansion of shift options.

[203] Finally, we think that a more limited and controlled introduction of extended shift options better meets the competing considerations arising within the statutory matters in s.275 of the Act. We think it reasonably accommodates the peak demand periods within Schweppes’ Tullamarine operation.

[204] We are prepared to include the following provisions in the Workplace Determination:

[205] The Schweppes proposal in relation to RDO arrangements within the 5 day shift patterns will be included in the Workplace Determination with some modification. The provision would be in the terms of clause 6.1 of Appendix E of the Schweppes proposed Workplace Determination, save that:

[206] We are prepared to include in the Workplace determination a provision authorising a trial of 6 day shift patterns (12 hours per day). We think a trial basis is appropriate to ensure that the first introduction of extended shifts is attended by proper planning and monitoring. The trial would be on the following basis:

[207] In each case, the trial will be subject to:

[208] As noted earlier, it is common ground that employees working the 7 day shift roster pattern will accrue 5 weeks annual leave per annum. Further, United Voice seeks an additional weeks’ annual leave for those employees working a 6 day shift pattern. We are not persuaded that United Voice has made out a case for the provision of additional annual leave in these circumstances.

[209] We will not, at this stage, determine shift loadings to apply for the trial, but we express the provisional view that the shift loadings proposed by Schweppes appear to be inadequate having regard to relevant loadings in the 2010 agreement and the transitional award and the arrangements proposed under the 6 day shift proposal for the working of the shifts. We invite further submissions in relation to the appropriate loadings for the purpose of the trial.

[210] Further, we will not at this stage, determine a transitional payment of the type reflected in clause 4.1.1 of the Schweppes Workplace Determination. Given the potential for the loss of income by some employees, we think some payment is desirable to mitigate any loss and encourage positive participation in the trial process. One option is a flat payment of the nature proposed by Schweppes, but the level of payment is a matter for further submissions. Moreover, it seems to us that given the trial we have proposed will impact differently on individual employees, depending on whether their work patterns and income is affected by the trial and given the wide diversity in the level of overtime worked in the recent past, that it may be more effective and fairer to structure transitional payments during a trial on the basis of relative loss of earnings. This is not a matter canvassed before us and we do not know whether there is a readily applied method of calculating the impact of the trial on individual earnings over its duration and structuring payment on the basis of a percentage of losses or a series of flat money amounts reflecting relative loss.

[211] We invite the parties to address both the form and quantum of a transitional payment in their further submissions, informed by the nature of the trial we have decided upon.

Issue (ii) Medical certificates for single day absences

[212] This issue concerns the circumstances in which employees are required to provide documentary substantiation for single day sick leave absences.

[213] Clause 23 of the 2010 Agreement provides that employees are not required to provide medical certificates for single day sick leave absences, except where such absences occur either side of a weekend, a public holiday, a rostered day off or scheduled leave.

[214] Schweppes proposes that the Workplace Determination should:

[215] The second aspect of Schweppes’ proposal is consistent with the provisions of the 2010 Agreement and United Voice agrees to the inclusion of a provision in these terms in the Workplace Determination. The first aspect of the proposal is a new requirement, and it is opposed by United Voice.

[216] Schweppes submits that it is not unusual, nor unreasonable, to require employees who take four or more single day sick leave absences in a 12 month period, to provide medical substantiation for those absences. Sick leave absences adversely impact upon Schweppes’ business. In particular, every time that an employee takes sick leave, the business has to fill the absence (but given the leave is not planned, this is usually on short notice) and in order to fill that absence, the business generally has to pay either overtime rates to its own employees (which costs approximately 175% more) or alternatively, has to fill the absence with temporary labour (which may be unskilled, costs approximately 20% more and affects the productivity of the entire line).

[217] Schweppes also submits that it was ‘likely’ that under the National Employment Standards it could insist on the provision of a medical certificate in the circumstances outlined in its proposal on the basis that ‘nothing short of a medical certificate being sufficient to satisfy a reasonable person in the circumstances’. 133

[218] Schweppes contends that its proposal would enable it to appropriately monitor the use of personal leave taken by employees and ensure that the impact of personal leave absences on the business is only necessitated by genuine illness or injury (either of the employee or in their capacity as a carer). During the course of his cross-examination, Mr Todd conceded that Schweppes could monitor the use of personal leave without the addition of the proposed certification requirements. 134 Schweppes’ real concern appeared to be about whether employees were genuinely sick when they were absent on a single day of sick leave.135

[219] United Voice supported the maintenance of the provisions in clause 23 of the 2010 Agreement and opposed the proposed change to those arrangements (as set out in paragraph [213] (a) above). The essence of the United Voice’s case is that the requirement to provide a medical certificate is not in the interests of the employees as it will result in additional cost and inconvenience. It is also submitted that ‘there is no evidence to justify the interests of the employer that support a change from the arrangements currently maintained at its other facilities’. 136

[220] The evidence establishes that almost 58% of all sick leave absences at the Tullamarine site are single day absences and that Tullamarine has the highest incidence of single day sick leave absences of all of the Schweppes sites.

[221] We accept that in the circumstances of this case it is reasonable that employees who take four or more single day sick leave absences be required to provide documentary substantiation for such absences. Both the merits and the public interest support such an outcome. An employee is only entitled to sick leave in circumstances where they are not fit for work because of personal illness or injury.

[222] A requirement for documentary substantiation in such circumstances also reflects a reasonable compromise between the added inconvenience to the employee and the employer’s concern to ensure that such leave is taken in circumstances of genuine illness or injury. This does however give rise to a question as to the nature of the documentary substantiation required.

[223] An appendix to the Schweppes written submission of 20 July 2011 details the substantiation requirements for single day absences for all of Schweppes’ sites. Another appendix details the incidence of single sick leave absences at these sites. The data in these two appendices is reflected in the table below.

Table 8: Single Day Sick Leave Absences at all Schweppes’ Sites FY2010/11

Site

Content

No. of Employees

Total Single Day Absences

Average Single Day Incidences by Employee

 

Tullamarine

 

Employees are required to produce a medical certificate for all absences taken as sick leave that occur on either side of a weekend, a public holiday, a rostered day off or any scheduled leave (whether or not the employees have taken more than 3 single day absences in a calendar year).

 

152

 

583

 

3.84

 

Huntingwood

 

Employees absent on personal/carer’s leave are required to produce a medical certificate from a registered medical practitioner, which states that the employee was unable to attend for duty on account of illness or injury or requires them to be the primary care giver of a member of their immediate family or household who is unwell or has suffered a medical emergency.

Absence of such documentation within the required timeframes will deem the employee is ineligible for payment for their absence.

In the case of a single day absence, in lieu of a medical certificate, Schweppes will accept two (2) statutory declarations in any one calendar year.

 

73

 

234

 

3.21

 

Prospect

 

Sick Leave

A medical certificate is required when two or more sick days are taken in succession or if a sick day is taken next to a weekend, public holiday or normal day off. In the event that it is not reasonably practical to obtain a medical certificate a statutory declaration must be provided detailing the same information. This must be provided to the Company as soon as reasonably practical.

Single Day Absences

An employee shall be allowed three single separate days sick leave in any one qualifying year without the need to produce a medical certificate.

Where an employee has been paid three single days sick pay he/she shall not be entitled to payment for any further days single sick leave unless he/she produces to the employer a medical certificate or if not practicable, a statutory declaration stating why not practicable.

Each employee will generally be notified by the pay office after they have taken three single days sick absence without producing a medical certificate.

 

12

 

27

 

2.25

 

Brisbane Distribution

 

The employee shall prove to the satisfaction of the Company that he/she was unable on account of such illness or injury to attend for duty on the day or days for which sick leave is claimed;

Single Day Absences:

(i) An employee shall be allowed three single separate days sick leave in any one calendar year without the need to produce satisfactory proof.
(ii) Where an employee has been paid three single sick days sick pay he/she shall not be entitled to payment for any further single day’s sick leave unless he/she produces to the employer satisfactory proof.
(iii) The pay office will generally notify each employee after they have taken three single days sick absence without producing satisfactory proof.

 

9

 

15

 

1.67

 

Ipswich

 

Certification of Personal/Carers Leave

An Employee shall not be entitled to payment for any days off sick unless the produce to the Employer as may be required a certificate of a duly qualified medical practitioner that in the medical practitioner’s opinion, the Employee was unable to attend for duty on account of illness or on account of injury by accident.

In lieu of a medical certificate the Employer will accept a Statutory Declaration.

 

18

 

33

 

1.83

 

Macgregor Production

 

Absences

The employee shall provide documentary evidence that he/she was unable on account of such illness or injury to attend for duty on the day or days for which sick leave is claimed.

Single Day Absences

An employee shall be allowed three single separate days personal/carers leave in any one calendar year without the need to produce documentary evidence.

Where an employee has been paid three single days sick pay he/she shall not be entitled to payment for any further days single sick leave unless he/she produces a to the employer appropriate documentary evidence.

The pay office will generally notify each employee after they have taken three single days sick absence without producing appropriate documentary evidence.

 

37

 

54

 

1.46

 

Payneham and Wingfield

 

A medical certificate is required when two or more sick days are taken in succession or if a sick day is taken next to a weekend, public holiday or normal day off.

 

19

 

3

 

0.16

 

Kewdale

 

A medical certificate is required when two or more sick days are taken in succession or if a sick day is taken next to a weekend, public holiday or normal day off. In the event that it s not reasonably practical to obtain a medical certificate a statutory declaration must be provided detailing the same information. This must be provided to the Company as soon as reasonably practical.

 

8

 

0

-

 

 

Osborne Park

 

A medical certificate is required when two or more sick days are taken in succession or if a sick day is taken next to a weekend, public holiday or normal day off. In the event that it s not reasonably practical to obtain a medical certificate a statutory declaration must be provided detailing the same information. This must be provided to the Company as soon as reasonably practical.

 

41

 

6

 

0.15

 

TOTAL

369

955

2.59

[224] It is apparent from Table 8 that the incidence of sick leave absences varies considerably from site to site and there is no evident correlation between the incidence of single leave absences and the substantiation requirements. Two examples serve to illustrate this point. The substantiation requirements at Huntingwood are, on one view of it, more onerous than those proposed by Schweppes in these proceedings, yet Huntingwood has the second highest incidence of single day sick leave absences. Further, 5 of 7 sites with a relatively low incidence of single day sick leave absences (ie. below the average across all of Schweppes’ sites of 2.59 single days’ absence per annum per employee) permit the substantiation of single day absences by statutory declaration.

[225] Schweppes rejects the proposition that a statutory declaration is an appropriate alternative to a medical certificate. In its written submission of 20 July 2012 Schweppes says, at paragraph 109:

[226] During the course of his cross-examination Mr Todd also rejected the proposition that a statutory declaration was an alternate way of verifying the genuiness of illness:

[227] The difficulty with Schweppes’ case in relation to the manner of substantiation is that it amounts to little more than assertion and is inconsistent with the position it has taken at a number of its other sites. Further, contrary to Schweppes’ submission, we are not persuaded that the National Employment Standards require the production of a medical certificate in the circumstances posited by Schweppes.

[228] The National Employment Standards provide that an employee (other than a casual employee) is entitled to 10 days paid personal/carer’s leave for each year of service (s.96). The notice and evidence requirements in relation to such leave are set out in Subdivision D of Division 7 of the Act. Section 107(3) relevantly provides that an employee taking personal leave must, if required by the employer, give the employer ‘evidence that would satisfy a reasonable person’ that the leave is taken because the employee is not fit for work due to personal illness or injury. The question of what would constitute ‘evidence that would satisfy a reasonable person’ is canvassed in the explanatory memorandum to this provision, which states:

[229] The Explanatory Memorandum acknowledges that the types of evidence commonly requested include a medical certificate or a statutory declaration. The only circumstances in which it is suggested that it may be reasonable for an employer to request a medical certificate are ‘in cases of an absence extending beyond a short period or repeated absences on particular days (e.g. before or after a weekend or public holiday)’. Neither of these circumstances are relevant in the context of the debate in these proceedings. We are dealing with single day absences not ‘cases of an absence extending beyond a short period’. Nor does the proposal at issue in these proceedings concern repeated absences on particular days - that circumstance is already addressed in paragraph (b) of Schweppes’ proposal which reflects the provision in the 2010 Agreement, and is agreed by United Voice.

[230] In determining the form of documentary evidence, we are required to have regard to the interests of the employer and employees. We accept that Schweppes is clearly of the view that medical certification, as opposed to a statutory declaration, is in its interests. The interests of the employees are also relevant.

[231] A number of the United Voice’s witnesses referred to the fact that they sometimes experienced difficulty in getting an appointment at the medical centre they usually attend 138 and to the additional inconvenience and costs associated with obtaining a medical certificate.139

[232] Mr Todd accepted that requiring an employee to produce a medical certificate was an additional inconvenience for the employee 140 and would be an additional cost to the employee if their medical practitioner did not ‘bulk bill’.141 Mr Todd also accepted that employees would prefer to see their treating doctor and that they may not be able to get an appointment to see their doctor on the day they are sick.142

[233] Mr Todd was also asked about what would happen if an employee was unable to get an appointment to see a doctor on the day they were sick:

[234] The evidence supports a finding that requiring employees to produce a medical certificate in the circumstances proposed is an added inconvenience to the employee and may have cost implications for the employee in circumstances where their medical practitioner does not bulk bill.

[235] In our view, an appropriate balance between the various considerations is that in respect of all single day sick leave absences in excess of 3 single day sick absences in a 12 month period (i.e. the 12 months immediately prior to the absence) employees should be required to produce either a medical certificate to the effect that the employee was unable to attend work on account of personal illness or injury, or a statutory declaration by the employee in those terms. A provision in these terms will be included in the Workplace Determination, in addition to the current substantiation requirements in clause 23 of the 2010 Agreement.

[236] As we have noted, a requirement for substantiation in the circumstances we propose is consistent with the merits; the public interest and the interests of the employer. Providing the option of either a medical certificate or a statutory declaration is consistent with Schweppes’ industrial practice at other sites and represents an appropriate balance between the interests of the employees and the employer. The merits favour such an outcome. The clause we have determined is also in the public interest. It will require employees to provide their employer with evidence that would satisfy a reasonable person that they are genuinely not fit for work, while minimising the inconvenience and potential additional cost to the employee.

Issue (iii) Wages and allowances increase

[237] United Voice seeks annual wage increases of 6%, with the first increase backdated to 23 September 2011. Schweppes submits that, subject to the introduction of its 12 hour shift proposal, it would support wage increases of no more than 3% per annum (based on the wage rates paid to employees under the 2010 Agreement), with the first increase payable on and from the first full pay period after the commencement of the Workplace Determination and subsequent increases at 12 monthly intervals. Schweppes opposes any retrospectivity. It submits that there are no ‘special’, ‘compelling’ or ‘exceptional’ circumstances warranting a retrospective wage increase 144 and in any event there is no power to grant retrospectivity as a determination commences operation on the day it is made (s.276(1)). Schweppes submits that the position was different under the Workplace Relations Act 1996 which empowered the Tribunal to allow s.170MX awards to operate retrospectively (s.170MX(1) and s.146(2) of that Act), however there is no such express power in relation to determinations made under the Act.

[238] The position of each party is contingent upon the decisions made by the Tribunal in respect of the other matters in issue. Accordingly, each party sought leave to make further submissions in respect of the level of increase in wages and allowances after we had determined the other matters. We will grant the leave sought and in section 6 of our decision we set out how we intend to proceed to finalise the Workplace Determination.

[239] While we do not propose to finalise our determination of this issue at this stage we think it may assist the parties if we make some preliminary observations about the matters which may be relevant to the assessment of wage claims in the context of workplace determinations.

[240] We are, of course, required to have regard to the factors identified in ss.275, 577 and 578, and to the objects of the Act in s.3.

[241] It is common ground that the following matters are relevant to the assessment of wage claims in the context of workplace determinations:

[242] Each of these matters is relevant, but not determinative. Ultimately, the wage increase determined depends upon a consideration of all the relevant circumstances including the other aspects of the determination.

[243] In terms of matter (i), the general economic environment is also relevant. An analysis of the economic projections for Victoria for the period from 2011 to 2016 is contained in Chapter 2 of the Victorian State Budget 2012- 2013. The table below is table 2.1 in Chapter 2, which is entitled ‘Victorian economic projections’: 149

 

    2010-11

Actual

    2011-12

    Forecast

    2012-13

Forecast

    2013-14

    Forecast

    2014-15

    Forecast

    2015-16

    Forecast

    Real gross state product

    2.5

    1.50

    1.75

    2.75

    2.75

    2.75

    Employment

    3.5

0.00

    0.25

    2.00

    1.75

    1.75

    Unemployment rate

    5.1

    5.50

    5.75

    5.50

    5.25

    5.00

    Consumer price index

    3.3

    2.25

    2.75

    2.50

    2.50

    2.50

    Consumer price index (excluding carbon price)

    3.3

    2.25

    2.25

    2.25

    2.50

    2.50

    Wage price index

    3.8

    3.50

    3.00

    3.25

    3.50

    3.50

    Population

    1.5

    1.60

    1.60

    1.60

    1.60

    1.60

[244] As to matter (ii), an analysis of the increases in wage rates in enterprise agreements covering employers in the non-metals manufacturing industry in Australia is as follows:

[245] As to the wage rates in comparable instruments, an analysis of the wage rates and increases afforded to employees performing the same or similar work at other Schweppes sites is a relevant consideration. The average wage rate increase in percentage and dollar terms at Schweppes’ other facilities for 2010 to 2013 is 3.55% per annum and $26.67 per week (based on classifications equivalent to Level 2 in the underlying modem award) respectively. Such increases are as follows:

Enterprise Agreement 2010 2011 2012 2013

 

    Schweppes Australia Pty Ltd Huntingwood NSW Enterprise Agreement 2010-2013

    3.50%

    $29.30

    3.50%

    $30.32

    3.50%

    $31.38

    N/A

    N/A

    Schweppes Australia Ipswich Enterprise Agreement

    2011-2014

    N/A

    N/A

    3.75%

    $23.94

    3.75%

    $24.84

    3.75%

    $25.77

    Schweppes Australia Pty Ltd- Macgregor Production

    N/A

    N/A

    3.60%

    N/A

    Enterprise Agreement 2010-2013 (as varied 2011)

    N/A

    N/A

    $27.17

    N/A

    Schweppes Osborne Park Collective Agreement 2010-

    2013

    4%

    $24.71

    4%

    $25.69

    1%

    $25.95

    N/A

    N/A

    AVERAGEINCREASE:

    3.75%

    $27.00

    3.75%

    $26.65

    2.96%

    $27.34

    3.75%

    $25.77

[246] In the course of their submissions, the parties relied on a range of other matters said to be relevant to the level of wage increase to be determined. We do not propose to canvass all of those matters now but we would make three provisional observations.

[247] First, Schweppes submits that ‘any claims for wage outcomes over and above the maintenance of real wages (ie. over CPI inflation) should be tied to and supported by increases in work values’. Three cases are cited in support of that proposition. 151 The proposition advanced by Schweppes was not the subject of much debate in the proceedings, given that the parties had expressed a desire to make further submissions. We have read the cases referred to by Schweppes and our provisional view is that they do not support the breadth of the proposition put. It seems to us that the authorities support a narrower proposition, namely that a party advocating the introduction of a new classification or allowance will need to satisfy the Tribunal that the proposal has merit. If the party advancing such a proposal does so on the basis of changes in work value, then they will need to demonstrate that the proposed classification or allowance satisfies the principles that have traditionally guided the Tribunal in its assessment of work value claims.

[248] Second, one of the factors advanced by United Voice in support of the increases it seeks is the fact that ‘(T)he employees have not received a pay increase since September 2010’. In reply Schweppes submits that ‘(T)here can be no assumption that there have to be regular increases in pay, the fact that the employees have not received a wage increase since August 2010 is irrelevant’. 152 Our provisional view is that the matter raised by the United Voice is a relevant consideration. We note that in Metropolitan Ambulance Service v LHMU,153 one of the authorities relied on by Schweppes in support of the proposition discussed at paragraph [245] above, the Full Bench had particular regard to:

[249] In that matter the Full Bench refused to award retrospectivity but ‘front loaded’ the increases:

[250] On the material presently before us we are not persuaded that an award of retrospectivity is warranted in this case. We will decide quantum of the first increase payable under the Workplace Determination after hearing further submissions.

[251] The final provisional observation we would make concerns the submission by United Voice that in determining the level of wage increase we should have regard to the fact that “Employees have suffered significant financial loss as a result of Schweppes locking them out for 8 weeks, over a period of peak activity”.

[252] In support of this proposition United Voice relies on the evidence of Mr Redford, who says:

[253] Schweppes submits that this is an irrelevant consideration, in that ‘It would be wrong to determine a wage outcome based on the impact that the bargaining campaign had on parties’. We think there is considerable force in this submission. Schweppes took protected industrial action during the course of enterprise bargaining and in doing so exercised its legal rights under the Act. We doubt that the consequences of such action is relevant to the assessment of the level of wage increases to be included in the determination. Our attention was not drawn to any relevant authority in support of the proposition advanced by United Voice.

[254] As we have indicated these observations are provisional only and we would be assisted if these matters were addressed in the further submissions to be filed in these proceedings.

Issue (iv) Size Change and Asset Care Allowances

[255] A ‘size change’ involves changes to a production line to enable different sized or packaged products to be produced (cans to bottles, to different volumes etc). The 2010 Agreement provides for the payment of individual and team allowances for the performance of this work, but makes no provision for the payment of an asset care allowance. United Voice seeks the maintenance of the current size change provisions contained in the 2010 Agreement and submits that under those provisions Schweppes cannot require or direct employees to perform size change functions as part of their normal job function. Rather, employees may elect to be trained in that process and then paid the specified allowance. Schweppes seeks to alter the position under the 2010 Agreement. We will return to Schweppes’ proposal in a moment.

[256] Schweppes defines asset care duties as involving ‘minor tasks to preserve the operating life and efficiency of the assets, such as checking lubrication levels and minor cleaning’. It seeks the inclusion of an asset care allowance in the Workplace Determination.

[257] The size change and asset care allowance clause proposed by Schweppes is in the following terms:

[258] Schweppes’ proposal differs from the ‘size change’ provisions of the 2010 Agreement in a number of significant respects:

[259] Mr Kunkel gave evidence that Schweppes’ proposed size change allowance would have the effect of reducing the remuneration some employees currently receive for performing size change work. The 2010 Agreement provides for a size change allowance of up to $23.62 per week, whilst Schweppes’ proposal involves payments of between $3.33 and $16.67 per week. United Voice expected that the current allowances would have increased in line with any wage increases under the Workplace Determination.

[260] There is a conflict in the evidence and the submissions of the parties as to the complexity of size change tasks.

[261] Schweppes submits that the size change duties are minor, require no trade qualifications or other special skills, and are performed by all comparable Schweppes employees at every other production site in Australia. 156 It submits that the current arrangements at the Tullamarine site are unproductive and unnecessary. As a consequence of the current arrangements, Schweppes does not have the capacity to require employees to perform these duties and production lines have to remain unproductive while Schweppes locates an available tradesperson or contractor to perform the tasks. In such circumstances, the production workforce waits around until these tasks are completed, which reduces the amount of output that can be achieved during guaranteed production hours.157

[262] Mr Angus also says that using actual data from 2011, the average time spent per week on size changes (by maintenance staff and employees who have volunteered to perform size change tasks) varied from line to line. On some lines the average is 0.4 hours per week whilst on the B4 line the average is more than 2.2 hours per week. 158

[263] Witnesses for United Voice gave evidence that many employees regard the work required for size changes, and proposed for asset care, as difficult and that it carries a lot of responsibility. If something goes wrong it has significant consequences and they believe it would be unfair to force employees to perform this work. Mr Villani gave evidence that employees are warned for one-off mistakes and that this increases the apprehension some employees have about undertaking the tasks involved in asset care and size change.  159

[264] In response to concerns raised in respect to the difficulty of size change and asset care tasks by United Voice witnesses, 160 Mr Angus said that:

[265] In relation to the asset care allowance, we note that the definition of asset care tasks advanced by Schweppes in submissions is not reflected in the proposed clause. Indeed the proposed clause contains no definition of the asset care tasks that employees can be required to perform. Further, if such tasks are indeed properly characterised as ‘minor’, such as ‘checking lubrication levels and minor cleaning’, it is not clear to us why any allowance is required. One of the agreed terms in the Workplace Determination, clause 38 - Productivity Improvements, appears to deal with the performance of such tasks. That clause is in the following terms:

[266] In the course of oral argument, senior counsel for Schweppes acknowledged that some of the asset care tasks might fall within the scope of clause 38.2. 162

[267] As to the quantum of the asset care allowance, Mr Angus says that basis asset care is expected to take one hour per week per machine/equipment on average to complete. He says that the average standard hourly rate of pay for an employee in the facility is approximately $30/hour and that the execution of the activities prescribed in the asset care standard operating practice will be conducted in ordinary time. He says, therefore, employees are essentially already being paid when they perform these basic tasks and that any allowance is over and above the ordinary time rate of pay. Mr Angus says that if an allowance of approximately 7% for each activities is assumed (e.g. washing and wiping with a rag) and 34% for more intricate activities is assumed (e.g. loosening bolts and performing minor adjustments) this translates to a weekly asset care allowance proposed by Schweppes which ranges from 41 cents per week in the laboratory to $10.16 per week on the palletiser.

[268] There is no evidence of how particular tasks were classified or how the time allocated to them was arrived at. Nor is there any evidence that this was the subject of consultation or agreement with employees and United Voice.

[269] United Voice submits that the changes that Schweppes seeks to introduce are essentially changes to classification; that is the skill, training and work requirements of production employees. United Voice argues that the proposals can more comprehensively and appropriately be analysed and dealt with through the review of the classification structure provided for in the proposed Clause 47.

[270] It is submitted that there is inadequate justification provided by Schweppes for the particular amounts that they propose for the various skills and tasks associated with asset care and size change work. The estimates of the time spent on size changes utilised by Mr Angus and the relationship between this and appropriate levels of payment are unclear. The interaction between size change work and asset care work has also not been examined and the work value impacts have not be appropriately scrutinised and discussed with employees and United Voice. 163

[271] Mr Angus was cross examined concerning the basis for the asset care allowance sought by Schweppes. In the course of that evidence he said that Schweppes intended to develop a detailed list of all the duties that will be requested of employees under the requirements of the proposed ‘asset care’ clause, but had not yet done so. Indeed only one ‘indicative document’ has been provided. It relates to one machine; the labelling machine on the bottling production line. The relevant evidence is extracted below.

[272] In its written submission of 20 July 2012, Schweppes advances the following submission in respect of these issues (footnotes omitted):

[273] We reject the proposition that in determining the quantum of an allowance in the context of an arbitral, merits based proceeding the Tribunal ‘should not be concerned with the nature of the work’ or the nature of the tasks for which the allowance is to be paid. One of the factors we are obliged to take into account in deciding which terms to include in a workplace determination is the merits of the case advanced in support of the proposed term (s.275(d)). We must be satisfied that the allowance proposed is appropriate having regard to the tasks to be performed.

[274] The proposition advanced by Schweppes amounts to little more than an invitation to rubber stamp the quantum of the proposed ‘asset care’ allowance and provide Schweppes with a licence to unilaterally fill in the duties to be covered by the allowance, at some later stage.

[275] In respect of the asset care allowance, Schweppes has failed to adequately identify the range of tasks to be performed and has failed to advance a satisfactory justification for the quantum of allowances proposed. In relation to the ‘size change’ allowance no satisfactory merit argument has been advanced in support of the quantums proposed.

[276] Simply put, Schweppes has failed to make out its case. Very little detail is provided in support of the proposed allowances. The scope of the asset care duties is undefined and in relation to the size change allowance the evidence is insufficient to persuade us that the proposal has merit. The proposed size change allowances vary by production line but the evidence does not establish an appropriate correlation between the quantum of the allowance and the complexity of the task. Mr Angus contends that the tasks are simple yet acknowledges that they require additional training and, depending on the type of size change, that training may take up to three months. 165

[277] We reject the claim advanced by Schweppes and adopt the proposition advanced by United Voice that the existing size change provision in the 2010 Agreement be incorporated in the Workplace Determination. The quantum of the allowances will be adjusted in accordance with the decision we ultimately make as to the adjustment of allowances generally.

[278] The Schweppes proposal can, and should, be the subject of discussions between the parties in the context of the classification structure review.

Issue (v) Workplace cooperation

[279] Clause 40 in the 2010 Agreement prevents employees who are not covered by the enterprise agreement, such as managers or supervisors, from performing the work of employees operating machinery/equipment who are covered by the enterprise agreement, except in limited circumstances.

[280] This clause was first introduced in 2000, as a term of the Schweppes Cottee’s Tullamarine Production and Warehouse Employees Enterprise Bargaining Agreement 2000. In his evidence Mr Angus says that the purpose of the clause was to protect overtime for employees, by ensuring that management and supervisors did not perform the work of employees in circumstances where those employees were otherwise available to perform that work.

[281] United Voice seeks the retention of this clause in the Workplace Determination. Schweppes submits that a clause to this effect (in any form) should not form part of the Workplace Determination, for two main reasons.

[282] First, Schweppes submits that the United Voice’s proposed clause is not a ‘permitted matter’ capable of being lawfully included in an enterprise agreement (or a workplace determination). 166 Schweppes submits the proposed clause, except in very limited circumstances, operates as a complete prohibition on managers and supervisors performing the work of employees and argues that there is no distinction between United Voice’s proposed clause and a clause proposing that contractors be prevented from performing the work of employees. They say that it is impermissible to prohibit the engagement or use of labour which is in competition with, or a substitute for, that of employees and it would be equally impermissible to prohibit the use of managers and supervisors to do the work of employees.

[283] Secondly, Schweppes contends that the proposed clause has no industrial merit because:

[284] Schweppes also says that United Voice on 14 December 2011 unconditionally withdrew its claim for clause 40 to be included in the proposed agreement, 173 and subsequent to this date, the first occasion on which United Voice raised that it wanted to pursue a clause similar to clause 40 of the 2010 Agreement was during the negotiations for the deed on or about 6 February 2012. Schweppes argues that United Voice’s unconditional withdrawal of the claim and then its reinvigoration for this arbitration is a powerful reason against including any such clause. In Bluescope Steel Ltd v CEPU174 the Tribunal said, in respect of an almost identical scenario, that this was a ‘paramount consideration’ in relation to the merits of the case, and that “no case had been made out for reviving the contractor’s claim for the purpose of the arbitration”.175

[285] United Voice seek the retention of a workplace cooperation clause as they say it is important for the job security of employees covered by the Workplace Determination and ensures that overtime, if required, is worked by employees in roles covered by the Workplace Determination. In response to Schweppes’ argument that United Voice withdrew their claim, and therefore the clause should not be included in any Workplace Determination, United Voice submit that they have always made clear their intention to pursue the claim in terms substantially similar to clause 40 of the 2010 Agreement. Mr Kunkel says that United Voice withdrew its claim out of an abundance of caution as Schweppes sent correspondence to the union demanding that it unconditionally withdraw its claim for the re-inclusion of the workplace cooperation clause in the new agreement and threatened legal action challenging the protected nature of United Voice’s industrial action. United Voice still considered that the clause would be found to be permitted and it was their intention to reinvigorate the status quo with the inclusion of the current clause should the Tribunal find in favour of United Voice in this matter. Mr Kunkel says that when the parties were negotiating a deed to facilitate the making of consent orders by the Tribunal, in the final days prior to the termination of the industrial action in this matter, one of the agreed terms was that United Voice would be reinvigorating its claim for a clause resembling the workplace cooperation clause. 176

[286] United Voice also relies on material which it submits demonstrates that there are safety concerns with employees operating machinery when they are not properly trained, are unfamiliar with the machinery and don’t regularly work on the machines so as to understand the system and operation of the machines. 177

[287] In its reply submission of 27 June 2012, 178 Schweppes submits that the safety concerns raised by United Voice are unfounded because:

[288] A clause in the form proposed by United Voice would be in the interests of the employees, but not in Schweppes’ interests. Further, we are not persuaded that such a clause is in the public interest. In our view, the clause imposes an unreasonable restriction upon the manner in which Schweppes may wish to operate its business. United Voice has failed to persuade us that the merit arguments, advanced in relation to such a clause, support its inclusion in the determination. Any safety concerns can be addressed through the established processes and in the context of this proposal the protection of employee overtime is not a sufficient reason to warrant the introduction of a provision which would impede the capacity of Schweppes to run its business efficiently. The fact that United Voice withdrew this claim in the course of bargaining is also a factor against now granting the claim.

[289] We do not propose to include the provision sought by United Voice in the Workplace Determination. As we have rejected the claim on its merits it is unnecessary for us to consider whether a provision in these terms is legally capable of being included in a determination, having regard to s.272(3) of the Act.

Issue (vi) Nominal expiry date

[290] A determination operates from the day on which it is made (s.276(1)) and continues to apply to the employees covered by it until it has passed its nominal expiry date and it is either terminated or displaced by a later enterprise agreement (ss.54, 58 and 279). A determination must specify a nominal expiry date which must not be more than 4 years after the date on which the determination comes into operation (s.272(2)).

[291] Schweppes seeks a nominal expiry date for the Workplace Determination of 1 April 2015 (i.e. a life of about 2.5 years). 181 United Voice submits that the Workplace Determination should expire on 23 September 2014, being 3 years after the nominal expiry date of the 2010 Agreement, and opposes changing the nominal expiry date to April.182

[292] This issue gives rise to two separate but inter-related questions: the duration of the Workplace Determination and the month in which the nominal expiry date falls.

[293] We have decided that the duration of the Workplace Determination will be 2 years and it will have a nominal expiry date in either September or October 2014, depending on when the determination comes into operation. In reaching this decision we have had regard to the merits; the interests of the relevant employer and employees; the public interest and the incentives to bargain at a later time. To a significant extent the considerations relevant to each of these factors overlap.

[294] The other factors in s.275 do not bear on our consideration of this issue. The factors in s.275(f) and (g) are neutral in our consideration and no party contended that the factor set out in s.275(e) (productivity) was relevant to this particular issue.

[295] Schweppes advanced six reasons in support of its proposed nominal expiry date.

[296] First, there should be a reasonable period of industrial stability before the re-introduction of bargaining backed by protected industrial action. This is said to be particularly so given:

[297] In relation to the last point, Mr Angus’ evidence was that:

[298] In his evidence, Mr Redford acknowledges that many members have lost trust during the bargaining process but says: “this distrust is not targeted at the company but at the management bargaining team of Mr Peter Todd and Mr Wayne Angus.” 184

[299] Second, the proposed nominal life will enable the new shift arrangements to be fully and properly implemented, and for the parties to assess how it is operating in practice and what aspects of it may be the subject of amendment during future enterprise bargaining.

[300] Third, the parties have agreed to undertake a classification structure review over a period of up to 12 months from the date of the Workplace Determination (clause 47), with any agreed (or arbitrated) changes to be fully and properly implemented during the life of the Determination. Schweppes submits that a nominal expiry date of April 2015 will best enable the parties to assess how the new structure operates in practice and what aspects of it may be the subject of amendment during future enterprise bargaining.

[301] Fourth, the usual industrial practice of the parties at the Tullamarine site is for new enterprise bargaining agreements to have a nominal period of operation of about 2.5 years, as shown in Table 2 below. The only recent difference was the 2010 Agreement. This had a shorter nominal life because it was entered into as an interim measure because the 2008 Agreement was transmitted to Schweppes, as a result of the demerger between Cadbury and Schweppes, and therefore could only operate for 12 months' post the transmission. 185

Table 2: Schweppes Tullamarine Agreements: Nominal Term

Agreement Name

Operative Date

Nominal Expiry Date

Length

Schweppes (Tullamarine) Production and Warehouse Employees

Enterprise Agreement 2010

9 June 2010

23 September 2011

1 year 3 months

Cadbury Schweppes (Tullamarine) and LHMU Production and

Warehouse Employees Enterprise Bargaining Agreement 2008

9 December 2008

23 September 2011

2 years 9 months

Cadbury Schweppes (Tullamarine) Production and Warehouse

Employees Enterprise Bargaining Agreement 2005

15 December 2005

23 September 2008

2 years 9 months

Cadbury Schweppes (Tullamarine) Production and Warehouse

Employees Enterprise Bargaining Agreement

15 May 2003

23 September 2005

2 years 4 months

Schweppes Cottee's Tullamarine Production and Warehouse

Employees Enterprise Bargaining Agreement 2000

12 February 2001

23 September 2003

2 years 7 months

Cadbury Schweppes Pty Ltd, Schweppes Cottee's Division, Tullamarine Production & Distribution Employees Agreement 1998

4 September 1998

23 September 2000

2 years

[302] Fifth, the average nominal life of enterprise agreements covering employers in the non- metals manufacturing industry in Australia is as follows: 186

[303] Finally, it is submitted that protected industrial action is more likely to cause significant harm to both Schweppes and its employees if it occurs over the summer months, where demand for Schweppes' products and labour is higher. 187 The peak season for Schweppes' production and sales capacity from the Tullamarine site usually runs from approximately October in one year to the end of February/March in the next. It is submitted that there is no good reason to retain a nominal expiry date which immediately preceded the peak season:

[304] Schweppes submitted that these types of considerations (particularly the third party impact and public interest considerations) led a Full Bench to observe, in relation to a nominal expiry date of a s.l70MX award for government-employed teachers in South Australia, that it was “desirable that the nominal expiry date should not coincide with the start of a new school/academic year.” 188

[305] It was Mr Angus’ evidence that based on his own experience of the industrial parties, “a mutually beneficial negotiated outcome is more likely where the parties do not have to resort to industrial action, and do not impose upon each other significant financial harm.” 189

[306] We are not persuaded by the submissions advanced on behalf of Schweppes. In our view a 2 year term will provide the parties with an opportunity to implement and evaluate the 12 hour shift arrangements we have determined while providing an incentive for the parties to bargain in relation to the introduction of further shift changes.

[307] In the course of cross-examination, Mr Angus said that if its proposed shift arrangements were incorporated into the Workplace Determination then Schweppes intended to implement the 6 day roster immediately and would commence the review of these arrangements at the first meeting of the Joint Consultative Committee following the implementation of the new roster arrangements. Mr Angus also said that it was his desire and hope that this review would be completed within 12 months. 190

[308] Further, in relation to the classification structure review Mr Angus’ evidence was that it was his desire that the review would be completed in the first 12 months of the Workplace Determination’s operation. Mr Angus conceded that a nominal expiry date of 23 September 2014 would provide sufficient time to review the 6 day roster and to complete the classification structure review. 191

[309] We accept that there has been a deterioration in the relationship between Schweppes and its employees as a consequence of the industrial action leading up to the termination of all protected action. A 2 year term will provide a reasonable period of industrial stability and an opportunity for the parties to repair their relationship.

[310] The peak season at the Tullamarine site usually runs from October in one year until February or March in the next and we also accept that protected industrial action is more likely to cause significant harm to both Schweppes and its employees if it occurs over the summer months when demand for Schweppes’ products and labour is higher. But we are not persuaded that these considerations warrant a departure from the established industrial practice at this site, which is for a September nominal expiry date.

[311] There is no impediment to the parties negotiating prior to the nominal expiry and changing that date from September to April may reduce the incentives for both parties to bargain effectively. A September or October nominal expiry date creates a shared incentive to conclude bargaining for a new agreement at or around the nominal expiry of the Workplace Determination. Employees have an incentive to conclude an agreement prior to the peak season because that is when they are usually working additional hours and the employer has an incentive to minimise disruption during the busiest production period. A shift to an April nominal expiry date removes both incentives and may serve to prolong the negotiations. 192

[312] Nor does it logically follow that an April expiry date will result in an amicable settlement. In fact it may simply protract the bargaining process. As Schweppes concedes in its written submission of 20 July 2011, at paragraph 92:

[313] It was also Mr Redford’s evidence that an April expiry date may simply delay resolution until the peak season. 193

[314] In this context, we note that in cross-examination Mr Angus conceded that it could be argued that providing a ‘nominal expiry date in September gave everyone a greater incentive to expedite the process, but not necessarily to come to an amicable resolution’. 194

[315] The bargaining history at the Tullamarine site also gives rise to some optimism as to the capacity of the parties to conclude an agreement amicably. Apart from the 2000 and 2011 negotiations the parties have been able to reach agreement without resorting to industrial action. In 2000 and 2011 both parties engaged in protected industrial action. 195

[316] We note that there is a difference between the parties about the industrial history at this site. In its reply submission of 27 June 2012 Schweppes submits, at paragraphs 5 and 10:

[317] No evidence is cited in support of the proposition that United Voice and the workforce has engaged in industrial action in ‘most enterprise bargaining of the last decade’. Schweppes’ assertion is directly inconsistent with Mr Redford’s witness statement at paragraph 20 where he says:

[318] Mr Redford has been an official with United Voice since April 2004 and in his current role he is responsible for overseeing the United Voice’s enterprise bargaining campaigns. Mr Redford’s evidence on this issue was unchallenged. We accept his evidence and reject Schweppes’ assertion as to the history of bargaining related industrial action on this site.

[319] Finally, in relation to the s.170MX decision relied upon by Schweppes (AEU v State of South Australia) we are not persuaded that considerations of third party impact and the public interest led the Full Bench in that case to arrive at its conclusion in respect of the award’s nominal expiry date. The Full Bench dealt with this issue at paragraph 988 of its decision:

[320] The Full Bench makes no reference to the considerations to which Schweppes refers. It is also relevant to note that no party advocated a nominal expiry date which coincided with the start of the new school/academic year (see paragraph [973] of the decision). It would be wrong to speculate upon matters not mentioned in the reasons which may have motivated the Full Bench’s decision. 196 Indeed, if the Full Bench had been motivated by matters of the kind suggested by Schweppes it would have been more likely to determine a late December nominal expiry date, just prior to the commencement of the summer vacation, rather than a time in the first term of the academic year.

5. Clause 47 - classification structure review

[321] This issue concerns whether clause 47 of the Draft Determination is an ‘agreed term’ or a ‘matter in issue.’

[322] United Voice argue that this was an agreed term. Schweppes argue that it is not an agreed term and have proposed an alternative clause which should be included in the Workplace Determination.

[323] The clause proposed by United Voice is in the following terms:

[324] As at the end of 2 March 2012, Clause 47 of the United Voice’s draft Workplace Determination was a matter agreed between the parties. Commissioner Jones conducted conciliation conferences between United Voice and Schweppes during the post industrial action negotiation period (the relevant statutory period). On 2 March 2012, the final day of that process, the wording of Clause 47 was agreed in conference before Commissioner Jones. On or about 5 March 2012 Commissioner Jones forwarded to the Company and the Union a document titled ‘Summary of Conciliation as at 2 March 2011.’ That document described the agreed matters and the matters to be arbitrated. The classification review clause was described in the document as agreed in the following terms:

[325] The draft clause proposed by Schweppes dated 4 January 2012 referred to by Commissioner Jones contained the provision that: “The parties commit to implementing a new classification structure by varying the agreement in accordance with the Fair Work Act 2009.” 198

[326] On 7 March 2012 Schweppes sent a draft agreement including the agreed terms to United Voice. That document includes the Classification Structure Review clause in the terms now proposed by United Voice and identifies it as an agreed term. 199

[327] On 15 March 2012 Schweppes advised United Voice that:

[328] The clause now proposed by Schweppes is in the following terms:

[329] The Schweppes clause differs from the clause agreed prior to the end of the relevant statutory period, in two main respects:

[330] Mr Angus, in the course of cross examination was taken to key features of United Voice’s proposed clause which were not now features of the alternative clause proposed by Schweppes. He accepted that Schweppes had agreed with those features prior to the end of the relevant statutory period. 201 On the issue of how a classification review would be finalised there was the following exchange:

[331] Commissioner Jones held further conciliation after the end of the relevant statutory period and drafted a proposal to address the concern raised by Schweppes concerning variation of the Determination to reflect any outcome of the classification review. 203

[332] Mr Angus responded in cross examination as follows.

[333] The parties did not reach agreement on a variation to Clause 47.

[334] Schweppes argue that notwithstanding that Clause 47 was agreed prior to the end of the relevant statutory period it is not an agreed term because:

[335] In respect to the question of satisfaction of the BOOT test, the Schweppes proposed clause provides that “for employees who commenced employment prior to the day the new classification structure commences operation - the new classification structure will not result in any reduction in rates of pay (when compared to the current classification structure)” whereas the clause agreed prior to the end of the relevant statutory period provided that “no employee will suffer financial disadvantage as a result of any new classification structure.” The Schweppes proposal also provides that new employees cannot have their rates of pay reduced below those specified for the comparable classification in the Award.

[336] Schweppes appears to be submitting that the words “no employee will suffer financial disadvantage as a result of any new classification structure” does not mean that new employees shall not be paid less than they would have been entitled to under the Award or the classification structure under the 2010 Agreement.

[337] Schweppes argues that if the term is not an agreed term then the clause it proposes is appropriate as it is effective and consistent with the wishes and ‘agreement’ of the parties. The Schweppes proposal includes a number of changes to the review process and timetable in the ‘agreed’ clause. United Voice argue that the changes proposed by Schweppes are not consistent with the wishes and ‘agreement’ of the parties.

[338] Schweppes submits that both parties wanted the outcome of the classification review to be legally enforceable as part of the Workplace Determination and assumed that this was to be achieved by varying the Workplace Determination. Schweppes also submits that the parties intended that if the classification review did not result in an agreement then either party could have the matter arbitrated. Mr Angus gave evidence that this was always the position of Schweppes. United Voice submit that the parties agreed prior to the end of the relevant statutory period that arbitration required the consent of both parties and that any outcome of the review was subject to majority vote of employees prior to its implementation. United Voice argues that the agreed Clause 47 does not permit any outcome which would result in any employee suffering financial disadvantage as a result of the new structure and that there is no issue with the BOOT.

[339] We are satisfied that the evidence demonstrates that Clause 47 was an ‘agreed’ clause and that it was intended that any new classification structure would be able to become the legally enforceable classification structure under the Workplace Determination, provided it was supported by a majority vote of the employees at the conclusion of the process set out in clause 47. The clause which was agreed prior to the end of the relevant period states “the parties commit to implementing a new classification structure by varying this agreement in accordance with the Fair Work Act 2009.” The parties agreed that this would only occur if there was an agreed outcome through the working party, or an agreed outcome through conciliation or consent arbitration.  205

[340] We also find that the words ‘no employee will suffer financial disadvantage as a result of any new classification structure’ in the proposed clause means, when read in context, that existing and new employees shall not be paid less than they would have been entitled to under the existing classification structure. On this basis we are satisfied that the proposed clause passes the BOOT. In the context of the determination as a whole, the flexibility provided by the possibility of a reviewed classification structure as constrained by the requirement that no employee will suffer financial disadvantage as a result, is not an impermissible delegation of the functions of the Tribunal to the parties. 206

[341] We now turn to the proposition that the clause was affected by common mistake, thereby making any agreement in respect of the clause void ab initio.

[342] The Act provides that an enterprise agreement may be varied, by consent, before its nominal expiry date (see Subdivision A of Division 7 of Part 2-4). The Tribunal may also vary as enterprise agreement to remove an ambiguity or uncertainty (s.217) or, on referral by the Australian Human Rights Commission, to ensure that the agreement does not require a person to do an act that would be unlawful under certain named Commonwealth discrimination acts (s.218).

[343] The Tribunal’s power to vary a workplace determination is much more limited. Section 279 provides, relevantly:

[344] It follows that the Tribunal does not have power to vary a workplace determination to remove an ambiguity or uncertainty; or to give effect to a variation agreed by the parties.

[345] Schweppes submits that the parties’ ‘agreement’ was affected by a common mistake, namely that the Tribunal had power to vary the determination in the manner contemplated by the parties. We propose to invite further submissions in respect of this issue, for reasons we set out in section 6 of our decision.

[346] Finally, we turn to deal with s.602. At the invitation of the Tribunal the parties made submissions as to whether the Tribunal could vary an agreed matter to correct an obvious error pursuant to s.602 of the Act. United Voice argued in support of this position 207 and Schweppes argued that the Tribunal cannot and should not use s.602 of the Act to correct an ‘obvious error’.208

[347] The relevant provision is as follows:

[348] The parties agree, and we accept, that s.602 enables the Tribunal to correct an error in relation to a decision of the Tribunal. The making of a workplace determination is a decision of the Tribunal. 209 Section 602 of the Act is intended to be the statutory analogue to the ‘slip rule’ in superior courts.210 The Tribunal cannot otherwise vary workplace determinations (s.603(3)). The parties also agree, and we accept, that the power under s.602 is not confined to errors made by the Tribunal but could extend to obvious errors made by the parties reflected in instruments the Tribunal makes.

[349] We note that the power to ‘correct or amend any obvious error, defect or irregularity (whether in substance or form)’ is in relation to ‘a decision’ of the Tribunal. It seems to us that this raises a temporal limitation. There must be a decision to correct before the power can be exercised.

[350] It follows that, if after hearing further submissions we decide to make a Workplace Determination including clause 47 in the form proposed by United Voice, a party may make an application to correct or amend the Workplace Determination pursuant to s.602. Any such application will be determined on its merits and accordingly, we do not wish to say anything further about the scope of the power in s.602. Such issues can be determined in the context of any subsequent application.

6. Conclusion and Further Submissions

[351] We now propose to set out the conclusions we have reached in respect of each matter in issue as well as any provisional views and the areas in relation to which we are seeking further submissions.

(i) Hours of work, RDOs, shift patterns and annual leave

[352] We are prepared to include the following provisions in the Workplace Determination:

[353] The Schweppes proposal in relation to RDO arrangements within the 5 day shift patterns will be included in the Workplace Determination with some modification. The provision would be in the terms of clause 6.1 of Appendix e of the Schweppes proposed Workplace Determination, save that:

(b) Proposed 6 and 7 day shift arrangements

[354] A provision authorising a trial of 6 day shift patterns (12 hours per day) on the following basis:

  • undertake a risk assessment and institute necessary control measures;


  • undertake a review of health and safety policies to incorporate consideration of any issues arising from the 12 shift arrangements we will make available, including any limitations on overtime identified by risk assessment as necessary in the context of a 12 hour shift;


  • Assess the availability of work to avoid any risk identified in relation to excessive manual handling arising from the 12 shift arrangements we will make available;


  • prepare any fatigue testing process identified arising from the 12 shift arrangements we will make available;


  • prepare any training or support required arising from the 12 shift arrangements we will make available; and


  • prepare any return to work process identified arising from the 12 shift arrangements we will make available;


    • [355] We will not, at this stage, determine shift loadings to apply for the trial, but we express the provisional view that the shift loadings proposed by Schweppes appear to be inadequate having regard to relevant loadings in the 2010 agreement and the transitional award and the arrangements proposed under the 6 day shift proposal for the working of the shifts. We invite further submissions in relation to the appropriate loadings for the purpose of the trial.

    [356] Further, we will not at this stage, determine a transitional payment of the type reflected in clause 4.1.1 of the Schweppes Workplace Determination. Given the potential for the loss of income by some employees, we think some payment is desirable to mitigate any loss and encourage positive participation in the trial process. One option is a flat payment of the nature proposed by Schweppes, but the level of payment is a matter for further submissions. Moreover, it seems to us that given the impact of the trial we have proposed will impact differently on individual employees, depending on whether their work patterns and income is affected by the trial and given the wide diversity in the level of overtime worked in the recent past, that it may be more effective and fairer to structure transitional payments during a trial on the basis of relative loss of earnings. This is not a matter canvassed before us and we do not know whether there is a readily applied method of calculating the impact of the trial on individual earnings over its duration and structuring payment on the basis of a percentage of losses or a series of flat money amounts reflecting relative loss.

    [357] We invite the parties to address the shift loadings and both the form and quantum of a transitional payment in their further submissions, informed by the nature of the trial we have decided upon.

    (ii) Medical certificates for single day absences

    [358] In respect of all single day sick leave absences in excess of 3 single day sick absences in a 12 month period (i.e. the 12 months immediately prior to the absence) employees will be required to produce either a medical certificate to the effect that the employee was unable to attend work on account of personal illness or injury, or a statutory declaration by the employee in those terms. A provision in these terms will be included in the Workplace Determination, in addition to the current substantiation requirements in clause 23 of the 2010 Agreement.

    (iii) Wages and allowances increase

    [359] The parties are to make further submissions in respect of this issue having regard to the decisions we have made in relation to the other matters in issue. We make three provisional observations in relation to the submissions already before us.

    [360] First, Schweppes submits that ‘any claims for wage outcomes over and above the maintenance of real wages (i.e. over CPI inflation) should be tied to and supported by increases in work values’. We have read the cases referred to by Schweppes and our provisional view is that they do not support the breadth of the proposition put. It seems to us that the authorities support a narrower proposition, namely that a party advocating the introduction of a new classification or allowance will need to satisfy the Tribunal that the proposal has merit. If the party advancing such a proposal does so on the basis of changes in work value, then they will need to demonstrate that the proposed classification or allowance satisfies the principles that have traditionally guided the Tribunal in its assessment of work value claims.

    [361] Second, one of the factors advanced by United Voice in support of the increases it seeks is the fact that ‘(T)he employees have not received a pay increase since September 2010’. In reply Schweppes submits that ‘(T)here can be no assumption that there have to be regular increases in pay, the fact that the employees have not received a wage increase since August 2010 is irrelevant’. 211 Our provisional view is that the matter raised by the United Voice is a relevant consideration. But the material presently before us we are not persuaded that an award of retrospectivity is warranted in this case. We will decide quantum of the first increase payable under the Workplace Determination after hearing further submissions.

    [362] The final provisional observation we would make concerns the submission by United Voice that in determining the level of wage increase we should have regard to the fact that “Employees have suffered significant financial loss as a result of Schweppes locking them out for 8 weeks, over a period of peak activity”.

    [363] Schweppes submits that this is an irrelevant consideration, in that ‘It would be wrong to determine a wage outcome based on the impact that the bargaining campaign had on parties’. We think there is considerable force in this submission. Schweppes took protected industrial action during the course of enterprise bargaining and in doing so exercised its legal rights under the Act. We doubt that the consequences of such action is relevant to the assessment of the level of wage increases to be included in the determination. Our attention was not drawn to any relevant authority in support of the proposition advanced by United Voice.

    [364] As we have indicated these observations are provisional only and we would be assisted if these matters were addressed in the further submissions to be filed in these proceedings.

    (iv) Size change and asset care allowances

    [365] We reject the claim advanced by Schweppes and adopt the proposition advanced by United Voice that the existing size change provision in the 2010 Agreement be incorporated in the Workplace Determination. The quantum of the allowances will be adjusted in accordance with the decision we ultimately make as to the adjustment of allowances generally.

    [366] The Schweppes proposal can, and should, be the subject of discussions between the parties in the context of the classification structure review.

    (v) Workplace cooperation

    [367] We do not propose to include the provision sought by United Voice in the Workplace Determination. As we have rejected the claim on its merits it is unnecessary for us to consider whether a provision in these terms is legally capable of being included in a determination, having regard to s.272(3) of the Act.

    (vi) Nominal expiry date

    [368] The duration of the Workplace Determination will be 2 years and it will have a nominal expiry date in either September or October 2014, depending on when the determination comes into operation.

    (vii) Classification structure review

    [369] This issue concerns whether clause 47 of the Draft Determination is an ‘agreed term’ or a ‘matter in issue.’

    [370] We are satisfied that Clause 47 was an ‘agreed’ clause and that it was intended that any new classification structure would be able to become the legally enforceable classification structure under the Workplace Determination, provided it was supported by a majority vote of the employees at the conclusion of the process set out in clause 47. The clause which was agreed prior to the end of the relevant period states “the parties commit to implementing a new classification structure by varying this agreement in accordance with the Fair Work Act 2009.” The parties agreed that this would only occur if there was an agreed outcome through the working party, or an agreed outcome through conciliation or consent arbitration.  212

    [371] We are also satisfied that the proposed clause passes the BOOT.

    [372] Schweppes submits that the parties’ ‘agreement’ was affected by a common mistake, namely that the Tribunal had power to vary the determination in the manner contemplated by the parties. In that context, one matter which does not seem to have been addressed in the submissions to date is the possibility that the outcome of the classification structure review could be incorporated into an enterprise agreement. Section 278 of the Act appears to contemplate that parties covered by a workplace determination may enter into a subsequent enterprise agreement, and that agreement then replaces the workplace determination.

    [373] We wish to hear further argument in respect of this issue. In particular, we will invite submissions on the following matters:

    [374] The Full Bench in CJ Manfield Pty Ltd v CEPU 214 dealt with a situation where an employer discovered an error in the agreement prior to the approval of the agreement and sought to withdraw from the agreement and oppose its approval by Fair Work Australia. This is of course a different situation to the circumstances in the present case. However, the employer argued in this case that no valid application for approval of an enterprise agreement has been made, as there is in existence no enterprise agreement within the meaning of s.172 of the Act because of the error or mistake.

    [375] At first instance Vice President Lawler 215found that:

    [376] The Full Bench observed that in approving agreements the Tribunal does not have any general discretion by reference to public interest considerations, the objects of the Act or general equity considerations. The Full Bench concluded:

    [377] It may be said that the same is true of the obligations on the Tribunal in respect to agreed matters and workplace determinations and that the Tribunal has no discretion to elect not to include an agreed clause in a determination utilising common law contract principles such as the existence of a common mistake. We invite further submissions on this point.

    PRESIDENT

    Appearances:

    Mr. F. Parry SC with Mr. M Follett of Counsel for Schweppes Australia Pty Ltd.

    Mr. C. Dowling of Counsel for United Voice – Victoria Branch.

    Hearing details:

    2012.

    Melbourne:

    April 5;

    June 29;

    July 3 to 5, 30.

     1   AE878586; PR998510.

     2   Exhibit Schweppes 10, at paragraph 6.

     3   The Union is the default bargaining representative for all of the Employees, and at no stage was any other bargaining representative appointed, or was it made known to either Schweppes or the Union that there had been an appointment.

     4   A Notice of Representational Rights had earlier been issued by Schweppes on 7 June 2011.

     5   PR520061.

     6   Exhibit Schweppes 9.

     7   Exhibit Schweppes 1, at paragraphs 5 - 6.

     8   Annexure WA-1 of Exhibit Schweppes 1.

     9   Exhibit Schweppes 1.

     10   Transcript, at PN 1123-1125.

     11   Transcript, at PN 1126-1132.

     12   Transcript, at PN 1134.

     13   Transcript, at PN 1137.

     14   Transcript, at PN 1137-1138.

     15   Transcript, at PN 1139.

     16   Transcript, at PN 1140.

     17   Exhibit Schweppes 1, at paragraph 14.

     18   Transcript, at PN 1144 and 1163-1165.

     19   Transcript, at PN 715-717 and 1209-1222.

     20   Transcript, at PN 1145-1161.

     21   Transcript, at PN 1954.

     22   Transcript, at PN 1168-1178.

     23   Transcript, at PN 1955.

     24   Transcript, at PN 1190-1197.

     25   Transcript, at PN 1958.

     26   Transcript, at PN 1198-1201.

     27   Transcript, at PN 1959.

     28   Transcript, at PN 1202-1206.

     29   Transcript, at PN 1960.

     30   Minister for Aboriginal Affairs v Peko-Wallsend (1986) 162 CLR 24.

     31   (1987) 16 FCR 167 at paragraph 184; cited with approval by Hely J in Elias v Federal Commissioner of Taxation (2002) 123 FCR 499 at paragraph 62 and by Katzmann J in CFMEU v FWA (2011) 195 FCR 74 at paragraph 103. Also see AWU v Pioneer Construction Materials Pty Ltd PR925916, 19 December 2002 at paragraph 33.

     32   AWU v Pioneer Construction Materials Pty Ltd PR925916, 19 December 2002 at paragraphs 32 - 33; CPSU v Australian Protective Service (PR910682) at paragraph 12 - 13.

     33   Exhibit Union 21.

     34   Pepsi Seven-Up Bottlers Perth Pty Ltd v FCT (1995) 62 FCR 289 at 298-9 per Hill J.

     35   Exhibit Union 21, at paragraph 20 - 21.

     36   Treasury submission to the House of Representatives Standing Committee on Economics Inquiry into raising the level of productivity growth in the Australian economy, August 2009.

     37   It is permissible to consult a specialist dictionary for the purpose of ascertaining the meaning of a technical term: Kirkpatrick v Commonwealth [1985] 9 FCR 36 at 41-42.

     38   Ross v R 91979) 141 CLR 432 at 440; Taylor v Public Service Board 91976) 137 CLR 208 at 213.

     39   Fair Work Act 2009 s.134(f).

     40   Fair Work Act 2009 s.284(1)(a).

     41   Craig Williamson Pty Ltd v Barrowcliff [1915] VLR 450 at 452 per Hodges J; Registrar of Titles (WA) v Franzon (1975) 132 CLR 611 at 618 per Mason J.

     42   Transcript, at PN 1540.

     43   Transcript, at PN 1540.

     44   Schweppes (Tullamarine) Production and Warehouse Employees Enterprise Agreement 2010 AE878586; PR998510.

     45   Exhibit Union 36.

     46   Outline of submissions on factors to be taken into account in consideration of 12 hour rosters, filed on 29 June 2012.

     47   Exhibit Schweppes 1, at paragraph 42.

     48   Exhibit Schweppes 1, at paragraph 44.

     49   Exhibit Schweppes 1, at paragraph 67.

     50   Exhibit Schweppes 1, at paragraph 69.

     51   Exhibit Schweppes 1, at paragraph 70.

     52   Transcript, at PN 670-672.

     53   Exhibit Schweppes 1, at 51-58.

     54   Exhibit Schweppes 1, at paragraphs 115-122.

     55   Exhibit Union 17, at paragraphs 185-200.

     56   Exhibit Union 17, at paragraph 195.

     57   Exhibits Schweppes 10-12.

     58   Transcript, at PN 649.

     59   Transcript, at PN 650.

     60   Exhibit Schweppes 2, at paragraph 78(b).

     61   Ibid.

     62   Transcript, at PN 583.

     63   Transcript, at PN 636.

     64   AE891120;  PR519339.

     65   Exhibit Union 17, at paragraphs 227-229 and transcript at PN 1324.

     66   AE891207; AG2011/3462.

     67   Exhibit Schweppes 4, at paragraph 11(a).

     68   Transcript, at PN 1053.

     69   Transcript, at PN 671.

     70   Transcript, at PN 670 -672.

     71   Transcript, at PN 1432-1433.

     72   Transcript, at PN 1423.

     73   Transcript, at PN 2386-2390.

     74   Exhibit Schweppes 2, at paragraph 34.

     75   Transcript, at PN 717.

     76   Transcript, at PN 717-719.

     77   Transcript, at PN 726.

     78   Exhibit Schweppes 1, at paragraph 80 and transcript, at PN 1211.

     79   Exhibit Schweppes 6, at paragraph 39(a).

     80   Transcript, at PN 674.

     81   Exhibit Schweppes 6, at paragraph 39(a).

     82   Transcript, at PN 1210.

     83   Exhibit Union 17, at paragraph 215.1 and clause 24 of the draft Determination.

     84   Exhibit Union 17, at paragraphs 185-200.

     85   Exhibit Union 17, at paragraph 195.

     86   Exhibit Union 17, attachment MK-24, final 2 pages

     87   Exhibit Union 36.

     88   Exhibit Union 22.

     89   Exhibits Union 23 and 24.

     90   Exhibits Union 25-35.

     91   20 July written submissions of United Voice , at paragraph 19.

     92   27 July written submissions of Schweppes, at paragraphs 30-38.

     93   Transcript, at PN 909-915.

     94   Transcript, at PN 1591.

     95   Transcript, at PN 992.

     96   Transcript, at PN 992-996.

     97   Transcript, at PN 1111.

     98   Transcript, at PN 1651.

     99   Transcript, at PN 1641.

     100   Transcript, at PN 1643.

     101   Transcript, at PN 617 and 620-622.

     102   Transcript, at PN 626-629.

     103   Transcript, at PN 583.

     104   Clause 6 in Attachment WA-6, to Exhibit Schweppes 1.

     105   Transcript, at PN 1716.

     106   Transcript, at PN 2590.

     107   Transcript, at PN 1540.

     108   Transcript, at PN 1580.

     109   Exhibit Schweppes 1, Attachment WA-6, in clause 7 of Appendix G and Exhibit Union 35.

     110   Exhibit Schweppes 1, Attachment WA-6, in clause 7 of Appendix F.

     111   Exhibit Union 36.

     112   Transcript, at PN 886-887.

     113   Exhibit Union 36.

     114   9 July 2012 written submissions of Schweppes, at paragraphs 30-38.

     115   Exhibit Schweppes 1, at paragraph 44 and 20 July 2012 written submissions of Schweppes, at paragraph 16.

     116   Transcript, at PN 2386-2390.

     117   20 July written submissions of Schweppes, Appendix Question A3.

     118   AE891120;  PR519339.

     119   AE891207; AG2011/3462 .

     120   Exhibit Schweppes 11, at attachment SAX-2.

     121   As updated in Attachment Sheet 4 from Annexure AX-1: Full Year employees in Exhibit Schweppes 24.

     122   As updated in Attachment Sheet 4 from Annexure AX-1: Normalised in Exhibit Schweppes 24.

     123   Exhibit Schweppes 1, at paragraph 71 - 72.

     124   Exhibit Union 20, at paragraph 21; Attachment MR3 to Exhibit Union 20.

     125   Exhibit Union 20, at paragraph 21; Attachment MR3 to Exhibit Union 20.

     126   Schweppes written submission of 20 July 2012, paragraph 44 and timeline graph attached.

     127   Exhibit Union 22.

     128   Exhibits Union 23 and 24.

     129   Exhibits Union 23 and 24.

     130   Transcript, at PN 670-672.

     131   Paragraph 110 Schweppes written submission of 20 July 2012.

     132   Transcript, at PN 670-672.

     133   Paragraph 110 Schweppes written submission of 20 July 2012.

     134   Transcript, at PN 1999-2002.

     135   Transcript, at PN 2003-2004.

     136   See generally paragraphs 102-109 of the United Voice written submissions of 20 July 2012.

     137   Transcript, at PN 2008.

     138   Exhibit Union 4, at paragraph 18; Exhibit Union 10, at paragraph 48; and Exhibit Union 13 at paragraph 26.

     139   Exhibit Union 6, at paragraph 21; Exhibit Union 8, at paragraph 35; Exhibit Union 10 at paragraphs 45-57; Exhibit Union 12 at paragraphs 22-23; and Exhibit Union 14 at paragraph 26.

     140   Transcript, at PN 2039.

     141   Transcript, at PN 2036-2038.

     142   Transcript, at PN 2040-2043.

     143   Transcript, at PN 2046.

     144   HSU v Austin Health (2009) 180 IR 41 at paragraph 32; CPSU v Australian Protective Service (PR910682) at paragraph 273­ 274; CPSU v Australian Protective Service (PR910682) at paragraph 274.

     145   HSU v Austin Health 92009) 180 IR41 at paragraph 35.

     146   Ibid at paragraph 45.

     147   Ibid at paragraph 43; Southlink Pty Ltd v TWUA (PR948148) at paragraph 43; State of South Australia v CEPU (PR957094) at paragraph 91.

     148   CPSU v Australian Protective Service (PR910682) at paragraph 266; State of South Australia v CEPU (PR957094) at paragraph 91; ANF v Queensland Department of Health (2003) 126 IR 244 at paragraph 102.

     149   Attachment WA-7 to Exhibit Schweppes 1; a copy of Chapter 2 of the Victorian State Budget 2012- 2013.

     150   Department of Education, Employment and Workplace Relations "Trends in Federal Enterprise Bargaining report for the March Quarter 2012”.

     151   HSU v Austin Health (2009) 180 IR 41 at paragraph 44; MAS and RAV v LHMU (PR960731) at paragraph 29; ANF v Queensland Department of Health (2003) 126 IR 244 at paragraphs 68-69.

     152   Schweppes submissions in reply filed 27 June 2012 at paragraphs 24-29.

     153   PR960731, 28 July 2005 per Lawler VP, Watson SDP and Hoffman C.

     154   Ibid at paragraph 21.

     155   Exhibit Union 16, at paragraph 39.

     156   Schweppes submissions, at paragraph 56.

     157   Schweppes submissions, at paragraph 57.

     158   Exhibit Schweppes 1, at paragraph 138.

     159   Exhibit Union 13, at paragraph 10.

     160   Exhibit Union 4, at paragraph 20; Exhibit Union 8 at paragraph 39; Exhibit Union 10 at paragraphs 52-54 and Exhibit Union 12 at paragraphs 28-29.

     161   Exhibit Schweppes 2 at paragraph 35.

     162   Transcript, PN 3036-3041.

     163   Exhibit Union 17, at paragraph 148 and paragraphs 150-152.

     164   Transcript, at PN 1768-1785.

     165   Transcript, at PN 1763-1767.

     166   Exhibit Schweppes 1, at paragraph 156.

     167   Exhibit Schweppes 2, at paragraph 39.

     168   Exhibit Schweppes 1, at paragraph 161(a).

     169   Exhibit Schweppes 7, at paragraph 32.

     170   APESMA v Yallourn Energy Pty Ltd (PR908444) at paragraph 26.

     171   AMWU v Curragh Queensland Mining Ltd (Print Q4464) at paragraph 24.

     172   AMWU v Curragh Queensland Mining Ltd (Print Q4464) at paragraph 24.

     173   Exhibit Schweppes 1, at paragraph 158.

     174   PR958900.

     175   PR958900 at paragraphs 82-85.

     176   Exhibit Union 17, at paragraphs 160-165.

     177   Exhibit Union 10, at paragraph 51; Exhibit Union 12 at paragraph 26; Exhibit Union 13 at paragraph 27.

     178   Schweppes reply submissions, at paragraphs 31 - 43.

     179   Exhibit Schweppes 2, at paragraph 37(b).

     180   Exhibit Schweppes 2, at paragraph 37(a).

     181   Exhibit Schweppes 1, at paragraphs 27-35.

     182   Exhibit Union 16, at paragraphs 7-31.

     183   Exhibit Schweppes 1, at paragraph 28

     184   Exhibit Union 16, at paragraph 23.

     185   Exhibit Schweppes 1, at paragraph 31.

     186   Exhibit Schweppes 1, at paragraph 32 and Attachment WA-5, a copy of the Department of Education, Employment and Workplace Relations “Trends in Federal Enterprise Bargaining report for the September Quarter 2011”.

     187   Exhibit Schweppes 1, at paragraph 33.

     188   AEU v State of South Australia (Print Tl383) at paragraph 988.

     189   Exhibit Schweppes 1, at paragraph 35.

     190   Transcript, at PN 1290-1292 and 1306-1307

     191   Transcript, at PN 1309-1311.

     192   Exhibit Union 16, at paragraph 9

     193   Exhibit Union 16, at paragraph 21.

     194   Transcript, at PN 1316-1317.

     195   Exhibit Union 16, at paragraph 11.

     196   Baldwin Francis Ltd v Patents Appeal Tribunal [1959] AC 663 at 693 per Lord Denning; Re Australian Insurance Employees Union; Ex parte Academy Insurance Pty Ltd (1988) 28 IR 214 at 215 per Dawson J.

     197   Exhibit Union 18, annexure MK-29, at paragraph 7.

     198   Exhibit Union 18, annexure MK-27.

     199   Exhibit Union 18, at paragraph 16.

     200   Exhibit Union 18, annexure MK-30.

     201   Transcript, at PN1786 - 1803.

     202   Transcript, at PN 1787 - 1792.

     203   Exhibit Union 18, at paragraph 35.

     204   Transcript, at PN 1798-1803.

     205   Transcript, at PN 1787-1803 and Exhibit Union 18.

     206   It is not analogous to the “opt out” agreements in the case of Commonwealth Bank of Australia v FSUA (2007) 157 FCR 329.

     207   Submissions of United Voice 20 July 2012, at paragraphs 154 - 164.

     208   Submissions of Schweppes 20 July 2012, at paragraphs 123 - 128.

     209   s.598(2).

     210   Fair Work Bill 2008 Explanatory Memorandum, at paragraph 2316.

     211   Schweppes submissions in reply filed 27 June 2012 at paragraphs 24-29.

     212   Transcript, at PN 1787-1803 and Exhibit Union 18.

     213   CJ Manfield Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia. [2012] FWAFB 3534.

     214   CJ Manfield Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia. [2012] FWAFB 3534.

     215   [2011] FWAA 9129.

     216   [2012] FWAFB 3534, at paragraph 60.

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